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SBA National Ombudsman’s2004 Report to Congress

Securing Rights & Benefitsfor Small Business

Hector V. BarretoAdministratorU.S. Small Business Administration

Michael L. BarreraNational OmbudsmanU.S. Small Business Administration

iiiSBA National Ombudsman’s

2004 Report to Congress

ContentsContentsContentsContentsContents

Acronyms and Abbreviations ................................................... v

The ONO Mission ................................................................... vii

ONO Regional Regulatory Enforcement Fairness BoardMembers, FY 2004 ............................................................ ix

Message from the SBA Administrator ...................................... xi

Introduction by National Ombudsman Michael Barrera ........... xiii

Executive Summary ............................................................... xv

ONO Results in Brief ................................................................ 1

Rating Federal Agency Response to Small Business ................. 5The Comment Process ....................................................................................................... 5Rating the Agencies ........................................................................................................... 6Federal Agency Rating Criteria for 2004 ............................................................................ 7Examining Federal Agency Response ................................................................................. 9Selected Best Practices of Federal Regulatory Agencies ..................................................... 23

Hearing the Voice of Small Business: Comments Filed ............ 25The High Cost of Compliance ......................................................................................... 25Costly Agency Errors ....................................................................................................... 27Confusing and Changing Regulations .............................................................................. 27Overly Rigorous Requirements ........................................................................................ 29

ONO Outreach: Increased Use of SBA Field Offices, RegFairBoards, and Technology .................................................... 31

Regional RegFair Boards: ONO’s Eyes and Ears ............................................................... 31ONO RegFair Hearings: Facilitating the Discussion ........................................................ 33Reaching Out and Following Up ..................................................................................... 33

Looking Ahead…Plans for the Future ..................................... 41Continuing to Reach Out ................................................................................................ 41Making More Creative Use of Technology ....................................................................... 41Increasing ONO Visibility ............................................................................................... 42Finally….......................................................................................................................... 42

Appendix: Media Outreach ..................................................... 43

vSBA National Ombudsman’s

2004 Report to Congress

Acronyms and AbbreviationsAcronyms and AbbreviationsAcronyms and AbbreviationsAcronyms and AbbreviationsAcronyms and Abbreviations

ADA Americans with Disabilities Act

AMS Agricultural Marketing Service

CMS Centers for Medicare & Medicaid Services

CPSC Consumer Product Safety Commission

DOD Department of Defense

DOL Department of Labor

DOT Department of Transportation

EEOC Equal Employment Opportunity Commission

EPA Environmental Protection Agency

FAA Federal Aviation Administration

FCC Federal Communications Commission

FDA Food and Drug Administration

FDIC Federal Deposit Insurance Corporation

FSIS Food Safety and Inspection Service

FY fiscal year

HACCP Hazard Analysis and Critical Control Point

INS Immigration and Naturalization Service

IRS Internal Revenue Service

NCUA National Credit Union Administration

NLRB National Labor Relations Board

OMB Office of Management and Budget

ONO Office of the National Ombudsman

PBGC Pension Benefit Guaranty Corporation

RegFair Regulatory Enforcement Fairness

SBA Small Business Administration

SBPRA Small Business Paperwork Relief Act of 2002

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

TAS Taxpayer Advocate Service

TEAM Targeted Entrepreneur Area Market

TIN taxpayer identification number

USDA U.S. Department of Agriculture

viiSBA National Ombudsman’s

2004 Report to Congress

What is an unfair enforcement action?

It can be repetitive audits or inspections, unreasonable fines or penalties, or threats

and/or acts of retaliation by a Federal agency.

The ONO MissionThe ONO MissionThe ONO MissionThe ONO MissionThe ONO Mission

The Office of the National Ombudsman (ONO) was created pursuant to the Small

Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). Specifically,

SBREFA directs the Ombudsman to:

■ Conduct Hearings in each of the 10 Federal regions to solicit comments regarding

Federal regulatory enforcement activities from small business concerns.

■ Work with each Federal agency with regulatory authority over small businesses to

ensure that small business concerns that receive or are subject to an audit, on-site in-

spection, compliance assistance effort, or other enforcement-related communication

or contact by agency personnel are provided with a means to comment on the en-

forcement activity conducted by such personnel.

■ Establish a means to receive comments from small business concerns regarding ac-

tions by Federal agencies or agency employees conducting compliance or enforce-

ment activities with respect to the small business concern. ONO also refers appro-

priate comments to the Inspector General of the affected agency whenever egregious

behavior is alleged. If requested, ONO will maintain confidentiality with regard to

the person and small business concern making such comments, to the same extent as

employee identities are protected under section 7 of the Inspector General Act of

1978 (5 U.S.C. App.).

■ File an annual report with Congress and affected agencies wherein enforcement ac-

tivities are evaluated based on substantiated comments received from small business

concerns and input from the Regulatory Enforcement Fairness (RegFair) Boards.

■ Provide affected agencies with an opportunity to comment on draft reports.

The Office of the National

Ombudsman within the U.S.

Small Business

Administration seeks to

foster a more small

business friendly Federal

regulatory enforcement

environment.

ixSBA National Ombudsman’s

2004 Report to Congress

ONO Regional Regulatory EnforcementFairness Board Members, FY 2004

The Small Business Regulatory Enforcement Fairness Act of 1996 authorized the Na-

tional Ombudsman and the creation of 10 Regional Regulatory Enforcement Fairness

Boards to help small businesses hold Federal regulators accountable for their unfair en-

forcement actions. Testimony gathered at RegFair Hearings about Federal regulatory ac-

tivity and comments, concerns, and complaints filed with the National Ombudsman

are reported to Congress each year. ONO forums around the country allow small busi-

ness owners to bring their concerns directly to the RegFair Boards, which enables small

businesses to come forward without having to go to Washington, D.C.

RegFair Board members are appointed by the Administrator of the Small Business Ad-

ministration (SBA). All RegFair Board members are volunteers, and all are small busi-

ness owners, operators, or officers. Achieving diversity is a major goal in selecting

RegFair Board members so that they accurately reflect the small business communities

they represent. This diversity extends to profession, business goals, gender, geography,

market size (e.g., small, medium, large, rural, and urban), ethnicity, and revenues. In FY

2004, the following people served on these Boards:

Region ILeo R. BlaisPawtuxet Valley Prescription Ctr., Coventry, RI

James M. Knott, Sr., ChairRiverdale Mills Corporation, Whitinsville, MA

David A. Tibbetts, Esq.Smith, Segel & Sowalsky, Boston, MA

Larry S. SchneiderColdwell Banker, Newcastle, ME

Laura L. MonicaHigh Point Communications Group, Bow, NH

Region IIW. Timothy Howes, ChairHowes & Howes, Raritan, NJ

Jose M. Garcia-RamisAction Service Corporation, San Juan, PR

Eric JenkuskySpark Management Resources, Oneonta, NY

Region IIIPamela Mazza, ChairPiliero, Mazza & Pargament, Washington, DC

Martin ShafferAmerican Vending, Clarksburg, WV

Frank A. Ursomarso, Sr.Union Park Automotive Group, Inc., Wilmington,

DE

Felix J. JacksonDataProbe Technical Service, Owings Mills, MD

Beverly DonatiWhite Oak Turf Care, Richmond, VA

Region IVR. Bruce McCrory, ChairKiker Corporation, Mobile, AL

Paul Hsu, Ph.D.Manufacturing Technology, Inc., Fort Walton

Beach, FL

xSBA National Ombudsman’s2004 Report to Congress

George Dobbins, Jr.Southern Communications Systems, Memphis,

TN

Douglas McFarlandRadio Station 98.9 - Charleston, Mt. Pleasant, SC

Stanley L. KingS. L. King & Associates, Atlanta, GA

Region VLyle J. Clemenson, ChairClemenson Enterprises, Brooklyn Park, MN

Lloyd E. Falconer*Seward Screw Products, Inc., Seward, IL

Doug HilbertProfessional Technical Development, East Lansing,

MI

Region VIA. Joseph Shepard, ChairArchway Capital, LLC, Dallas, TX

Harold McAlpineChristmas Tree Farm, Bismark, AR

Jose Cuevas, Jr.JumBurrito, Midland, TX

Mary Ann WeemsWeems Galleries and Framing, Albuquerque, NM

Regina HamiltonJones, Walker, Waechter, Poitevent, Carrere and

Denegre, LLP, Baton Rouge, LA

Region VIIPaul Kinyon, ChairRealty Advisors LLC, Cedar Rapids, IA

Clark StewartButler National Corporation, Olathe, KS

Jeanette PrengerECCO Select, Kansas City, MO

James J. ZiebarthZiebarth Farms, Wilcox, NE

Nikki SellsExpress Personnel Services, Springfield, MO

Region VIIIJames J. LarsenSioux Steam Cleaner Corp., Beresford, SD

Salvador Gomez, Jr.Source One Management, Inc., Denver, CO

Michael StranskyGilles, Stransky, Brems & Smith, Salt Lake City,

UT

Nancy Warneke-GaynorGaynor River Bend, Whitefish, MT

Brenda MosherInterim Health Care of Wyoming, Casper, WY

Region IXFrank BallesterosPPEP Microbusiness & Housing, Tucson, AZ

Barry M. Gold, ChairBarry M. Gold & Co., Irvine, CA

Patricia ChevalierBlue Hawaiian Helicopters, Kahului, HI

Robert L. GoreBecker Realty Corporation, Las Vegas, NV

Kimberly KingKing Security Services, San Francisco, CA

Region XMilford Terrell, ChairDeBest Plumbing & Mechanical, Inc., Boise, ID

Michael DahmerSystems Associates, Inc., Jerome, ID

Carl GrossmanPublic Private Partnerships, Inc., Portland, OR

Shiao-Yen Wu9500 Roosevelt Way NE, Seattle, WA

Sue LinfordLinford of Alaska, Anchorage, AK

*It is with deep sorrow that ONO acknowledgesthe death of Lloyd E. Falconer, 64, of Rockford,Illinois, on November 2, 2004. In 1977, Lloydjoined Seward Screw Products, Inc., where hebecame an officer of the company. As a constantchampion of small business, he was a member ofthe National Federation of Independent Businessand later sat on many national business boards,including the ONO RegFair Board in Region V.His activism was a model for other small businesspeople in terms of taking control of their owndestinies. His other roles in the business commu-nity included serving as President of Seward AgSupply, Inc., President of Solarcone, Inc., andmember of the Advisory Council on Agriculture,Labor and Small Business of the Federal ReserveBank of Chicago. Lloyd was a passionate advocatefor small business interests throughout his life. Hewill be greatly missed. He is survived by hismother, Vara Falconer, wife Brenda, children Sarahand Andrew, and grandchildren Alexander andJohn Luna.

xiSBA National Ombudsman’s

2004 Report to Congress

Message from the SBA Administrator

I am pleased to present to you the Small Business Administration’s National

Ombudsman’s 2004 Report to Congress.

Early in his Administration, President George W. Bush launched a very proactive Small

Business Agenda, which emphasized lower taxes, less regulation, and greater advocacy

on behalf of this vital segment of our economy. Through Bush Administration efforts,

small businesses received $75 billion in tax cuts and enjoyed $6 billion in cost savings

last year due to advocacy efforts to ease compliance with overly burdensome Federal

regulations.

Another key component to advocacy is the work done by the Office of the National

Ombudsman, under the leadership of National Ombudsman Michael Barrera. Con-

gress created this office in 1996 to give small businesses a voice when they believed that

a Federal agency or representative was treating them unfairly. The results achieved in

2004 are impressive. The Office of the National Ombudsman has become a force in

the regulatory environment for small business, as the contents of this annual report to

Congress attest.

Going forward, we at SBA and the Office of the National Ombudsman will not rest on

our laurels. We will continue to strive to serve small businesses and respond to their

needs, particularly with regard to lifting the Federal regulatory burden off their backs.

Doing so will free small businesses to grow, create jobs, be innovative, and contribute

even more to our Nation’s economy. In the process, we will help small business owners

attain their own version of the American Dream.

Hector V. Barreto

SBA Administrator

xiiiSBA National Ombudsman’s

2004 Report to Congress

Introduction by National OmbudsmanMichael Barrera

In fiscal year 2004, the Office of the National Ombudsman continued to “raise the

bar” in advocating for America’s small businesses. Due to our increased outreach and

the efforts of our RegFair Board members, we received 445 comments and participa-

tion from small businesses and trade associations representing more than half a million

members. Attendance at ONO RegFair Hearings grew as awareness of our effectiveness

on behalf of small business increased.

Consistent with President George W. Bush’s Small Business Agenda, ONO is commit-

ted to taking the unfair regulatory burden off the backs of small business. To that end,

we continued to promote change within Federal agencies. Owing to the President’s

leadership, Federal agencies are adopting a more small business friendly approach to

America’s entrepreneurs by encouraging compliance assistance instead of enforcement

as the first action taken when working with a small business. Our message to Federal

regulators is to remember that most small businesses want to play by the rules and do

not intend to violate regulations. Rather, in many cases, small businesses simply “don’t

know what they don’t know” and they need their government’s assistance, not interfer-

ence. We feel this message has resonated with Federal agency personnel here in Wash-

ington, D.C., and across the country. Four years ago, no one would have imagined that

a member of the President’s Cabinet would conduct a day-long training session for

regulators on compliance assistance. Yet on September 23, 2003, Labor Secretary Elaine

Chao did exactly that and personally presided over the session to emphasize the impor-

tance President Bush places on helping small business.

ONO has held Hearings in 43 States over the last three years. As we traveled the coun-

try, we listened to the concerns of small business and carried their issues to the Federal

agency involved. We also increased our efforts to reach out to minority, women, and

veteran small business organizations to make them aware that the National Ombuds-

man is ready and willing to help them with any challenges they experience with Federal

agencies. Moreover, in FY 2004, attendance by Federal agency representatives increased

at our Hearings and often resulted in the resolution of issues at the Hearing itself. I es-

pecially want to commend the Department of Labor, the Internal Revenue Service, and

the Department of Agriculture’s Food Safety and Inspection Service for attending ev-

ery RegFair Hearing.

xivSBA National Ombudsman’s2004 Report to Congress

I am pleased that the President and SBA Administrator Hector Barreto have entrusted

me and my staff with this important responsibility. This report to Congress represents

the results we have achieved and reflects our progress in encouraging Federal agencies to

understand the needs and dreams of small business.

Michael L. Barrera

National Ombudsman

xvSBA National Ombudsman’s

2004 Report to Congress

Executive Summary

In FY 2004, the Office of the National Ombudsman concentrated on strengthening its

staff and increasing its outreach efforts to small business. Additionally, ONO trained

28 Regulatory Enforcement Fairness Board members, who went on to play important

roles in conducting outreach and marketing to raise awareness of ONO and elicit par-

ticipation at RegFair Hearings. This approach paid off in FY 2004. Nationwide, ONO

conducted 18 Hearings in 18 States and 10 regions, and received a total of 445 com-

ments from small business owners. This number is up from 412 comments in FY

2003, 319 in FY 2002, and 22 in FY 2001. Also, ONO held the first-ever national-

level Hearing in Orlando, Florida, in May 2004, featuring testimony from small busi-

ness owners from around the country. The increase in comments received demonstrates

ONO’s growing impact among its small business constituents.

ONO solidified old and established new partnerships in FY 2004 with the Federal

agencies that regulate small businesses, working together to make the relationship be-

tween government and industry one of mutual benefit. ONO also continued to work

closely with SBA’s Office of Advocacy to respond to the needs of small business and to

the President’s message that “small business matters.”

ONO rated 60 Federal regulatory agencies and divisions in FY 2004, using seven rating

criteria: timeliness, quality of response, existence of a non-retaliation policy, provision

of compliance assistance, participation in RegFair Hearings, provision of SBREFA

rights notice, and compliance with the Small Business Paperwork Relief Act of 2002.

The agency response rate to filed comments increased along with the quality of the re-

sponses. Nationally, agencies significantly increased the amount of compliance assis-

tance training they gave small businesses and continued to demonstrate best practices in

how they addressed their SBREFA responsibilities. ONO is especially pleased to see the

growing number of agencies that have established written non-retaliation policies: 32

agencies now have written policies in place, 10 more than last year and 18 more than in

FY 2002.

Even though positive changes continue to be made in the regulatory enforcement

arena, small businesses still feel the unequal effects of regulatory enforcement actions.

Across the country at Hearings and Roundtables, trade association meetings, and small

business forums, ONO heard about the high cost of compliance and agency errors, the

frustration of confusing and changing regulations, and the unreasonableness of overly

“I notice a real change in

the attitude of State and

Federal bureaucrats in

terms of working with small

business owners.”

—Bill Smith, State Director,

National Federation of

Independent Business,

Madison, WI, Hearing,

April 2004

xviSBA National Ombudsman’s2004 Report to Congress

rigorous requirements. Cost of compliance is a major concern of small businesses: those

with fewer than 20 employees spend $6,975 a year per employee to comply; this is 60

percent more than for firms with at least 500 employees.1 ONO counters these costs by

helping small businesses seek relief from excessive regulatory enforcement burdens. The

first ONO economic impact study, prepared in FY 2004, showed that ONO saved

small businesses at least $19.7 million in 2003.2

RegFair Board members are ONO’s “eyes and ears” across the country. Working with

SBA field offices, Board members engage in myriad activities to spread the word about

ONO and to elicit small business concerns. In FY 2004, ONO media exposure had

potential audience of 19.78 million people, reaching roughly 9 million small businesses

through trade associations, chambers of commerce, newsletters, and media outlets.3

Trade associations have been an effective communications channel for ONO. In FY

2004, trade association attendance at ONO Hearings and Roundtables reflected repre-

sentation of more than 589,000 small business members. This past year, the focused ef-

forts of one trade association, with leadership from a RegFair Board Chair and ONO,

resulted in 100 comments filed in response to the actions of a single regulatory agency.

ONO also continued its outreach to Federal agencies to increase their participation and

to improve comment and response efficiency connected to the SBREFA process. Many

agencies in turn have increased outreach to small business entities through their web-

sites and other means, including seminars and workshops. Federal agencies have also

made important strides in civil penalty abatements, reductions, or waivers extended to

small entities, which in FY 2003 and FY 2004 totaled nearly $3.9 billion combined.

ONO continued to respond to the needs of emerging small business communities,

holding 14 Targeted Entrepreneur Area Market—TEAM—Meetings in FY 2004 to ap-

prise leadership from emerging and diverse small business groups about ONO services.

Looking ahead, ONO will continue to develop and engage in innovative outreach ef-

forts to leverage resources through optimal use of technology and the Internet; partner-

ships with SBA and other Federal agencies, trades, and chambers; and outreach to small

businesses, community organizations, and media outlets. ONO will work with its re-

source partners and with Federal regulatory enforcement agencies to carry out the

President’s mandate to help small businesses succeed, thereby helping the country’s

economy as a whole.

Small Businesses DriveOur Economy

Small businesses—those in-

dependently owned and oper-

ated with fewer than 500 em-

ployees—represent more than

99.7 percent of all employer

firms, and were responsible

for all net new jobs in 2000–

01; in fact, they have gener-

ated 60–80 percent of net

new jobs annually over the

last decade. Numbering 25

million in the United States,

small businesses represent

over 50 percent of our gross

domestic product. They also:

� Employ half of all private

sector non-farm

employees.

� Employ 39 percent of

private sector workers in

high-tech occupations

(according to the Census

Bureau).

� Are 53 percent home-

based and 3 percent

franchises.

� Make up 97 percent of all

identified exporters,

producing 29 percent of

the known export value in

FY 2001.

Source: SBA Office of Advo-

cacy, “Small Business by the

Numbers,” 2004, www.sba.

gov/advo/stats/sbfaq.pdf.

1W. Mark Crain and Thomas D. Hopkins, “The Impact of Regulatory Costs on Small Firms” (Washing-ton, DC: SBA Office of Advocacy, 2001).

2Jonathan Skolnik and Paul Nguyen, “Saving Small Business from Excessive Enforcement: An EconomicImpact Analysis of the Office of the National Ombudsman” (Washington, DC: SBA ONO, 2004).

3This number was obtained by combining attendance at Hearings and Roundtables with a percentage ofArbitron rating findings for various media in which ONO had exposure (see appendix).

1

SBA National Ombudsman2004 Report to Congress

1ONO Results in BriefONO Results in BriefONO Results in BriefONO Results in BriefONO Results in Brief

The following summarizes notable Small

Business Administration (SBA) Office of

the National Ombudsman (ONO) ac-

complishments during FY 2004:

■ ONO conducted 18 Hearings in 18

States and 10 regions—two were bilin-

gual, one in English/Spanish, and one

in English/Mandarin Chinese. ONO

also held an inaugural national-level

Regulatory Enforcement Fairness

(RegFair) Hearing in Orlando, Florida,

on May 21, in conjunction with the

“SBA Expo ’04: Celebrating National

Small Business Week” conference. Tes-

timony from small business owners na-

tionwide was heard, and RegFair Board

members presented comments from

small business owners in their regions.

■ ONO received a total of 445 com-

ments from small businesses, up from

412 in FY 2003, 319 in FY 2002, and

22 in FY 2001 (figure 1-1).

■ ONO hosted two interagency meet-

ings last year and held 14 Targeted En-

trepreneur Area Market (TEAM)

Meetings around the country. TEAM

Meetings facilitate efforts to target

leadership from emerging and diverse

small business groups.

■ In FY 2004, 10 agencies joined the

growing list of those with written non-

retaliation policies; 32 agencies now

have written polices in place, up from

14 in FY 2002.

■ The first Office of the National Om-

budsman economic impact analysis

was prepared in FY 2004. According

to the study, ONO saved small busi-

nesses at least $19.7 million in 2003.1

■ ONO performed more than 439 cus-

tomer assistance actions via telephone

and email, and wrote and distributed

six E-Blast electronic newsletters to

2,800 subscribers, up from 2,000 sub-

scribers in FY 2003.

■ ONO held five RegFair Board mem-

ber meetings/conference calls in FY

2004 and trained 28 RegFair Board

members.

■ ONO Hearings and other meetings in

FY 2004 drew the attendance of repre-

sentatives from a variety of business

service and trade organizations, whose

collective membership totaled 589,581.

■ Interviews and exposure through all

media reached a potential audience of

19.78 million in FY 2004. ONO

1Jonathan Skolnik and Paul Nguyen, “SavingSmall Business from Excessive Enforcement: AnEconomic Impact Analysis of the Office of theNational Ombudsman” (Washington, DC: SBAONO, 2004).

Figure 1-1. Number ofComments Received,2001–04

22

319

412445

2001 2002 2003 2004

2

SBA National Ombudsman2004 Report to Congress

reached roughly 9 million small busi-

nesses through trade associations,

chambers of commerce, newsletters,

and media outlets.2 RegFair Board

member outreach activities were one of

the main drivers in achieving these

outstanding results.

■ Under the Small Business Paperwork

Relief Act of 1992 (SBPRA), Federal

agencies in FY 2004 reported to the

National Ombudsman nearly $2 bil-

lion in civil penalty abatements, reduc-

tions, or waivers for small entities. For

2003 and 2004 combined, the re-

ported total will be nearly $3.9 billion.

Additionally 120,691 fewer civil penal-

ties were assessed in FY 2004 (versus

FY 2003) in terms of enforcement ac-

tions involving small entities.

■ As a result of the leadership of the Re-

gion I RegFair Board Chair, ONO re-

ceived 100 comments from small busi-

ness pharmacies protesting a Food and

Drug Administration (FDA) ruling on

compounding of drugs for use in ani-

mals—a ruling that affected pharma-

cists’ bottom line and their ability to

practice good medicine for their ani-

mal patients. Through ONO follow-

up efforts, FDA agreed to review and

revise its rules to be more equitable to

small pharmacies. This result affects

several thousand small pharmacies na-

tionwide.

■ In FY 2004, ONO’s efforts on behalf

of small business concerns netted mul-

tiple success stories, including these:

– ONO helped save a Utah farming

business more than $4,600 through

a comment filed with the Internal

Revenue Service (IRS) that resulted

in no money owed.

– ONO helped a pharmacy company

stay in business by facilitating cor-

rection of an address error that was

keeping $500,000 in benefit pay-

ments from arriving, severely threat-

ening the small firm’s survival.

– ONO helped a small tax prepara-

tion firm avoid $3,100 in fines by

facilitating an exchange (via a video

Hearing from Spokane, Washing-

ton) with a representative of IRS’s

Taxpayer Advocate Service (TAS),

who agreed to authorize a means for

the company to verify taxpayer ID

numbers before submitting reports,

thereby avoiding penalties.

■ Federal agencies engaged in innovative

compliance assistance efforts in FY

2004 to help small businesses under-

stand regulations rather than just pe-

nalize them for violations.

– The U.S. Coast Guard offers com-

mercial fishing vessels free dockside

examinations to assess compliance

with requirements; when discrepan-

cies are found, it issues a “work list”

but no citation.

– The Equal Employment Opportu-

nity Commission (EEOC) in-

creased its no-cost outreach and

2This number was obtained by combiningattendance at Hearings and Roundtables with apercentage of Arbitron rating findings for variousmedia in which ONO had exposure (see appendix).

Our Partners Voice TheirSupport…

“We share [ONO’s] interest in

reducing the regulatory bur-

den placed on small busi-

nesses and look forward to a

continued partnership with

your office in achieving the

goals of the Small Business

Regulatory Enforcement Fair-

ness Act.” —Michael

Chesman, Director, Office of

Taxpayer Burden Reduction,

Internal Revenue Service

“ONO should be viewed as an

important piece of the regula-

tory puzzle that small busi-

nesses face. While SBA’s Of-

fice of Advocacy gives small

businesses a presence prior

to the issuance of regulations,

the National Ombudsman

gives them recourse subse-

quent to that issuance, which

really is an important part of

trying to provide help to the

small business community—

help that is very necessary for

small businesses.” —Giovanni

Coratolo, Director of Small

Business Policy, U.S. Chamber

of Commerce

3

SBA National Ombudsman2004 Report to Congress

education programs targeting small

businesses; and, in its St. Louis Dis-

trict Office, EEOC partnered with

the local chamber of commerce and

a Small Business Development Cen-

ter at a local university to offer free

training sessions for small business

owners and entrepreneurs.

– The Pension Benefit Guaranty Cor-

poration (PBGC) uses alternative

dispute resolution to achieve con-

sensual resolution in compliance

and enforcement matters.

– The Office of Hazardous Materials

Safety within the Department of

Transportation’s (DOT’s) Research

and Special Programs Administra-

tion answers questions via a dedi-

cated toll-free line.

– “Tax Talk Today,” a monthly IRS

program about current tax issues

and policies, allows viewers to ask

questions via email, fax, or tele-

phone (www.taxtalktoday.tv/).

– The Department of Labor (DOL)

launched an innovative outreach ef-

fort to help employers and employ-

ees understand its updated overtime

pay regulations. A free, interactive

Web-based tool allows users to ap-

ply the updated rules to their spe-

cific employment situations.

■ Federal agencies made greater efforts to

inform small businesses of their right

to comment when violations are is-

sued, this criterion being new last year.

Agencies have stepped up to the plate,

as these examples show:

– As part of their exit conference, in-

spectors working for the Food

Safety and Inspection Service (FSIS)

within the U.S. Department of Ag-

riculture (USDA) provide manage-

ment with a host of informational

contacts to help them with food

safety and impending enforcement

actions. This information has pro-

vided valuable linkages with univer-

sity outreach programs that help

businesses come into compliance.

– Community outreach conducted by

the Department of Commerce’s

Community-Oriented Policing and

Problem Solving program includes

providing guidance on a variety of

regulatory issues through nation-

wide industry workshops, town hall

meetings, and temporary help lines.

– Customs and Border Protection up-

dated its legacy Immigration and

Naturalization Service (INS) proce-

dures to include, for the first time, a

Small Business Regulatory Enforce-

ment Fairness Act of 1996 (SBREFA)

Notice with all assessments of im-

migration law violations.

– The Federal Aviation Administra-

tion (FAA) requires enforcement

personnel to enclose in every pen-

alty notice or letter a statement ad-

vising the small entity of its right to

contact the National Ombudsman

and how to do so. The statement

also assures small entities that they

can express their concerns without

fear of penalty or retaliatory acts.

…More Partners, MoreSupport

“The National Ombudsman’s

Office, in terms of fighting the

fight against agency abuses,

is indispensable. It’s an indis-

pensable tool for small busi-

ness.” —Andrew Langer, Man-

ager, Regulatory Policy,

National Federation of Inde-

pendent Business

“I think the fact that the Na-

tional Ombudsman has been

persistent with Federal agen-

cies, who in turn have been

receptive to helping small

businesses, is providing both

a carrot and a stick to making

great progress. There is no

doubt that the aggressiveness

of National Ombudsman

Barrera has made a big, big,

difference in the way that

agencies are dealing with

small businesses across the

country—and I’ve been in-

volved with regulatory compli-

ance issues since 1997.”

—Thomas G. Hicks, Sr., Super-

visory Small Business Regula-

tory Compliance Advisor, U.S.

Department of Labor, Office of

Small Business Programs

5

SBA National Ombudsman2004 Report to Congress

Agencies are increasingly taking small

business comments to heart, particularly

as the National Ombudsman continues to

heighten follow-up efforts to hold them

accountable. Agencies were more respon-

sive to small businesses in FY 2004 and

provided more compliance assistance

training, guidance, and encouragement to

small businesses.

Agencies also increased their efforts to

educate Federal employees, often

incorporating SBREFA requirements into

personnel training curricula, thereby

encouraging a more cooperative atmo-

sphere with the businesses they regulate.

The Comment ProcessONO has several methods for receiving

comments from small businesses. Com-

ments are delivered by U.S. mail, at Hear-

ings, online via the ONO website

(www.sba.gov/ombudsman), or by email

([email protected]), fax, or toll-free

telephone (1-888-REG-FAIR or 1-888-

734-3247). The ONO comment form

(SBA 1993, Federal Agency Comment

Form) is also available at www.forms.gov.

Figure 2-1 (right) illustrates the break-

down of how comments were received in

2004. The trend is for much greater use

of ONO’s website to file comments, in-

creasing efficiencies for the Office as well

as the busy small business person. On the

website, commenters can fill out a form

online and instantly transmit their com-

ments to ONO; this is part of the Office’s

continuing efforts to streamline its pro-

cesses and reduce filing time. Small busi-

nesses that fear retaliation may register

their comments confidentially.

All comments received are reviewed to en-

sure that they are within ONO’s jurisdic-

tion. If a “yes” answer can be given to

these three questions, then ONO has ju-

risdiction:

1. Are you a small business owner, small

government entity (i.e., those serving

populations below 50,000), or small

nonprofit organization?

2. Is your comment about a Federal Gov-

ernment agency?

3. Have you been the subject of unfair or

excessive regulatory enforcement ac-

tion by a Federal agency?

If jurisdiction exists, a letter is sent to the

commenter indicating that the comment

has been forwarded to the appropriate

Federal agency. Many times, small busi-

nesses submit comments that address

what may be hot-button issues for them

but are outside of ONO’s jurisdiction,

2Rating Federal Agency Response toRating Federal Agency Response toRating Federal Agency Response toRating Federal Agency Response toRating Federal Agency Response toSmall BusinessSmall BusinessSmall BusinessSmall BusinessSmall Business

Figure 2-1. How CommentsWere Received

242

48

41

26

86

2

Online

Email

Fax

U.S. mail

Hearings (testimony)

Phone call

6

SBA National Ombudsman2004 Report to Congress

such as when the commenter is not a

small business or the issue pertains to a

State issue. In these cases, the commenter

is sent a letter referring him or her to the

appropriate authority; in some cases, the

comment itself is referred by ONO di-

rectly to the agency.

Of the 445 total comments submitted in

FY 2004, 266 were within ONO’s juris-

diction. The remaining 179 comments

were referred to other agencies and/or de-

partments within SBA, thereby fulfilling

another major ONO goal: to put small

business people in touch with those who

can help them—even when it is not

ONO. Figure 2-2 shows a breakdown of

who filed comments in FY 2004.

Once a comment is reviewed and jurisdic-

tion determined, the small business is

asked for substantiating documentation.

This information includes dates, locations

of the business, and an explanation of

why the small business believes it was

treated unfairly. The completed packet is

then forwarded to the appropriate Federal

agency, with a letter from ONO contain-

ing a list of seven questions for the agency

to answer (see sidebar, next page). By ask-

ing these questions, ONO can assess the

degree to which an agency considered the

effects of its enforcement action on small

business and the kinds of quality controls

and follow-up activities that took place,

such as conversations with field personnel

about a particular case.

Generally, ONO faxes and/or emails the

paperwork to agencies and works with a

designated agency contact, helping to ex-

pedite the response. If the commenter al-

leges retaliation or any grossly unprofes-

sional type of activity, ONO will refer the

comment to the Inspector General within

the particular agency.

Once an agency response letter is received,

ONO forwards a copy to the small busi-

ness. In some cases, fines are reduced or

eliminated and decisions changed in favor

of the small business (see success story be-

low). If an agency foresees a delay in re-

sponding, it is asked to send a detailed let-

ter to ONO stating the reason(s) why.

Again, ONO received quality responses in

2004, with nearly every agency receiving

an “A” rating for this criterion.

Rating the AgenciesONO is required to rate Federal agencies

on how they respond to the comments of

small businesses and entities. The rating

ONO Helps Mining Company Win Favorable Decision

A mining company filed a comment on two citations it received from the Mine Safety

and Health Administration for late filing of quarterly reports, which the company had

mailed on time. The comment was sent to the Department of Labor, which rescinded

the citations, finding that the reports were, in fact, filed on time. The Assistant Secre-

tary of Labor for Mine Safety and Health Administration, David D. Lauriski, personally

apologized to the small business owner involved for the time and effort expended.

We may not always promise

a small business the

answer they want, but we

will try to get them an

answer or someone who

can provide them an

answer.

—National Ombudsman

Michael Barrera

Figure 2-2. Breakdown ofComment Filers

Small businesses (411)

Nonprofits(19)

Associations (8)

Other (7)

7

SBA National Ombudsman2004 Report to Congress

process allows agencies to work toward

achieving regulatory enforcement fairness

objectives, according to the criteria on

which they are evaluated. In basic terms,

ONO is looking at agencies for their

openness in providing information on

regulatory requirements and for their

fairness in enforcing them. Federal

agencies are increasingly cooperating

with ONO and conducting more out-

reach with small businesses, continuing

to change the regulatory enforcement

culture to a more small business friendly

one.

Timeliness and quality of response are im-

portant objectives, as is the development

or strengthening of non-retaliation poli-

cies and attendance at Hearings and

Roundtables. Availability of regulatory en-

forcement compliance assistance is also an

important objective and therefore an

evaluative criterion, as is the provision of

notice when citations are issued, includ-

ing agencies informing small businesses of

their right to comment to the National

Ombudsman. Agency compliance with

SBPRA requirements was also evaluated

for the first time in FY 2004. Table 2-1

later in this section presents an evaluation

and rating of agency responsiveness to the

FY 2004 rating criteria.

Federal Agency RatingCriteria for 2004Below are the seven criteria used to rate

Federal agency response to small busi-

ness concerns in FY 2004. The itali-

cized text represents changes planned

for FY 2005.

1. Timeliness1 in responding to small en-

tity comments.

■ Over 30 days

■ Over 60 days

■ Over 90 days

■ Over 120 days

2. Quality of response to small entity

comments.

■ The agency addressed the questions

posed in ONO’s letter to it for-

warding the comment [to be added

in FY 2005: and responded to the spe-

cific comment made by the small en-

tity].

■ The agency response came from a

high-level representative (i.e., some-

one from the SBREFA office at the

agency or someone from the pro-

gram office directly related to the

comment).

■ The agency provided detailed infor-

mation showing that it looked into

the facts of the specific comment

and the actions of the individual(s)

agency personnel involved in the

enforcement activity.

■ The agency responded [in FY 2005:

or took corrective action(s) including,

but not limited to, reducing or waiv-

ing penalties, adopting a new policy to

avoid recurrence of an inappropriate

result, or conducting additional out-

Questions Asked ofFederal Agencies

Receiving Comments

� Why and how did you take

the enforcement or com-

pliance action?

� Did you notify the small

business about the en-

forcement or compliance

action? If so, did your

agency provide the busi-

ness an opportunity to

come into compliance?

� Did you review the action

of the investigator, auditor,

inspector, or individual to

ensure compliance with

your agency’s policies and

procedures?

� Were your agency’s re-

gional and program offices

responsive to the small

business?

� Was the small business in-

formed of its right to con-

tact the Office of the Na-

tional Ombudsman?

� Did your agency consider

alternatives such as waiv-

ing penalties or reducing

fines before seeking an en-

forcement action against

the small business?

� As a result of the issues

raised by this small busi-

ness concern, has your

agency implemented any

changes to address this

situation in the future? If

so, please describe the

changes implemented.

1Response time is calculated from the day thecomment is forwarded to the agency until it isreceived by the ONO. Although ONO mayaccept requests for additional time to respond, theclock, for rating purposes, does not stop.

8

SBA National Ombudsman2004 Report to Congress

reach with compliance assistance] to

the comment made by the small en-

tity.

3. Agency non-retaliation policy.

■ The agency has adopted a written

non-retaliation policy.

■ The agency ensures its employees

are aware of its non-retaliation

policy.

■ The agency ensures small entities

are aware of [in FY 2005: and may

access] its non-retaliation policy.

■ Agency employees and small entities

are aware of the consequences of

not adhering to the agency non-re-

taliation policy.

4. The agency establishes a baseline and

provides measurable regulatory en-

forcement compliance assistance, with

increase expressed in percent over

baseline.

■ The agency provides small entities

with a compliance assistance tele-

phone number.

■ The agency provides a compliance

assistance website.

■ The agency makes a compliance as-

sistance employee available to small

entities.

■ The agency provides [in FY 2005:

and documents] compliance assis-

tance education.

5. The agency participates in Regulatory

Enforcement Fairness Hearings and

meetings when issues related to their

mission are presented in testimony.2

■ More than 90 percent of the time.

■ More than 80 percent of the time.

■ More than 70 percent of the time.

■ More than 60 percent of the time.

6. The agency [in FY 2005: establishes a

policy wherein it] provides written and

verbal notice to small entities when a

citation or notice of regulatory viola-

tion is issued. [In FY 2005: Policy

should include, but not be limited to]:

■ The agency provides written notifi-

cation of SBREFA rights to small

business concerns.

■ The agency informs small business

concerns of their right to comment

about the enforcement/compliance

process to the National

Ombudsman’s Office.

■ The agency verbally informs small

entities of their right to comment

about the enforcement/compliance

process to the National

Ombudsman’s Office.

■ The agency provides in writing [in

FY 2005: and/or on appropriate

website locations] the National

Ombudsman’s Internet address,

www.sba.gov/ombudsman, to small

entities.

7. The agency complies with reporting

requirements of the Small Business

Paperwork Relief Act of 2002, H.R.

2If no issues related to the agency’s mission arepresented during the fiscal year, this criterion willbe rated as not applicable (N/A).

“We try to make it easier

for small business to do

what they do best—

conduct business.”

—National Ombudsman

Michael Barrera

9

SBA National Ombudsman2004 Report to Congress

327-5, paragraphs 1, 2, 3, and 4, and

presents a copy of these reports to

ONO on or before the due date estab-

lished by statute. The following infor-

mation should be included:

■ The number of enforcement actions

in which a civil penalty is assessed.

■ The number of enforcement actions

in which a penalty is assessed

against a small entity.

■ The number of enforcement actions

in which a civil penalty is reduced

or waived for small entities.

■ The total monetary amount of re-

ductions or waivers against small

entities.

In FY 2004, ONO used the questionnaire

form shown in figure 2-3 to gather the in-

formation needed from agencies to deter-

mine their ratings.

Examining FederalAgency ResponseONO rated 60 Federal regulatory agen-

cies and their divisions in resolving com-

plaints about excessive enforcement of

Federal regulations (see table 2-1). This

rating, which is somewhat comparable to

a “customer satisfaction” rating for the

different agencies, is based on how they

responded to the seven criteria delineated

in the sidebar on page 7. Agencies receive

a grade for each criterion, with all grades

then averaged for a final rating.

Federal agencies made great strides in im-

proving the Federal enforcement environ-

ment in FY 2004. Response time im-

proved, and a dramatic increase occurred

in the compliance assistance offered to

small businesses.

Agency Comments RegardingRatings

After ONO completed its initial draft re-

port, it was posted to the ONO website

for comment by the agencies and RegFair

Board members. Several agencies responded

and adjustments were made. The follow-

ing agency comments are those ONO de-

termined did not justify a rating change:

Figure 2-3. ONO Questionnaire to Agencies for FY 2004Annual Report

10

SBA National Ombudsman2004 Report to Congress

Table 2-1. Rating of Agencies According to FY 2004 Criteria

Non- Compl- RegFair Informs SBPRA Re-Timeli- Quality of Retal- iance Partici- Small port Sub- Annual

Agency ness Response iation Assistance pation Business mitted Rating

Agriculture B A B B C A- B B

Agricultural Marketing Service B A B B N/A A B B+

Animal Plant Health Inspection Service C B A A N/A A B A-

Food Safety and Inspection Service B A A A A A B A-

Food and Nutrition Service A- A C C C C B B

Forest Service D A C C C C B B

Foreign Agricultural Service A- A N/A N/A N/A A B A

Rural Development N/A N/A C C N/A C B B+

Commerce B+ A A A N/A A B A-

Commodity Futures Trading Commission N/A N/A A A N/A A A A

Consumer Product Safety Commission N/A N/A A A N/A A C- A-

Defense B+ A F F N/A F F D+

U.S. Army Corps of Engineers B A F F N/A F F D+

Defense Contract Management Agency B+ A C C N/A C F C+

Air Force N/A N/A F F N/A F F F

Energy D+ A F C N/A A B C

Environmental Protection Agency C A A A A A C B+

Equal Employment Opportunity Commission A- A A A A A A A

Federal Communications Commission A- A B B A A A A-

Federal Deposit Insurance Corporation N/A N/A A A N/A A A A

Federal Energy Regulatory Commission A A A A N/A A A A

Federal Reserve System N/A N/A A B+ N/A A A A

Federal Trade Commission A A A A N/A A A A

General Services Administration A- A F A N/A A F B-

Health and Human Services C A A B C A B B+

Centers for Medicare & Medicaid Services C+ A A A A A B B+

Food and Drug Administration B A A A A A B A-

Homeland Security A A C- A A A F B

Coast Guard A- A A A N/A A C A-

Customs and Border Protection A- A A B A A A A-

■ Commenting on its timeliness grade of

“C,” the Environmental Protection

Agency (EPA) said that an emphasis on

rapid response may come at the ex-

pense of efforts to provide both SBA

and the commenter with meaningful

information. EPA advocates that

ONO allow Federal agencies 45 days

to respond so as to strike a balance be-

tween a timely response and an infor-

mative one.

■ The Department of Labor’s Wage and

Hour Division requested reconsidera-

tion of its final grade, believing it

should be an A- and not a B+, based

on the average it obtained when assign-

ing particular numerical values to each

grade (i.e., A+=97, A=95, A-=90, etc.).

11

SBA National Ombudsman2004 Report to Congress

Table 2-1. Rating of Agencies According to FY 2004 Criteria (continued)

Non- Compl- RegFair Informs SBPRA Re-Timeli- Quality of Retal- iance Partici- Small port Sub- Annual

Agency ness Response iation Assistance pation Business mitted Rating

Citizenship and Immigration Services D- A C C C C F C-

Housing and Urban Development C+ B A A N/A A A B+

Interior B A A B B B A B+

Bureau of Land Management B A B A B B A B+

National Park Service B A C C N/A C A B

Internal Revenue Service C A+ A A A A A A-

Justice C+ A A A N/A N/A F B

Office of Consumer Litigation A- A C C C C F C+

Bureau of Prisons B A C C N/A C F C

Bur. of Alcohol, Tobacco, Firearms, & Explosives F A C C F D F D

Labor C+ A A A A A A A-

Occupational Safety and Health Administration C A A A A C+ A A-

Mine Safety and Health Administration B A A A A B A A

Wage and Hour Division D+ A+ A A A B A B+

National Aeronautics and Space Administration N/A N/A A C N/A N/A F C

National Credit Union Administration A- A A A N/A C A A-

National Labor Relations Board A A N/A A N/A A A A

Nuclear Regulatory Commission N/A N/A A B N/A C A B

National Science Foundation A- A A D N/A C F C+

Pension Benefit Guaranty Corporation N/A N/A A A N/A A A A

Securities and Exchange Commission A- A A A N/A A A A

Small Business Administration A A A A A A A A

State A A A A N/A A A A

Transportation B+ A A A N/A A A A-

Federal Highway Administration A- A A B N/A A A A-

Federal Aviation Administration C A A B N/A A A B+

Federal Motor Carrier Safety Administration A A A B N/A A A A-

National Highway Traffic Safety Administration N/A N/A A B N/A A A A-

Research and Special Programs A- A A B N/A A A A-

Veterans Affairs D- A C D N/A C F C-

Rating Scale: A = 11, A- = 10, B+ = 9, B = 8, B- = 7, C+ = 6, C = 5, C- = 4, D+ = 3, D = 2, D- = 1, F = 0

ONO uses a different scale, as shown

in table 2-1 above.

Timeliness of Response—Criterion 1

In FY 2004, more agencies responded

comprehensively to the comments and in-

quiries of small business. Several also re-

sponded in a timely manner, with 35 out

of 51 agencies rated receiving between an

A and B in this category. Others made ef-

forts to improve their timeliness track

records (see sidebar, next page). The Con-

sumer Product Safety Commission

(CPSC) views timeliness of response as an

important part of overall customer satis-

faction and, in FY 2004, the agency’s goal

of responding to 80 percent of all small

12

SBA National Ombudsman2004 Report to Congress

business inquiries within 3 business days

was exceeded, as stated in its FY 2004 Per-

formance and Accountability Report. EPA

(earning a “C” for timeliness) explained

that a rapid response might come at the

expense of a thorough one. IRS (receiving

a “C” for timeliness) expressed similar

concerns, and its Taxpayer Advocate Ser-

vice called for modification of the timeli-

ness criterion to address the complexity of

the issues it receives in comments and to

ensure that its answer is accurate and

complete. A TAS representative argued

that a complete answer sometimes re-

quires extensive gathering of documents

and a detailed letter documenting each

important fact and action that was taken

on a particular taxpayer account. The Na-

tional Ombudsman continues to stress

the importance of a timely response and

will work with agencies to address re-

sponses to the more complex issues.

Timeliness grades are given according to

the ranges in table 2-2. Figure 2-4, oppo-

site page, shows how many days on aver-

age it took Federal agencies to respond to

the comments they received in FY 2004.

Quality of Response—Criterion 2

In assessing the quality of a Federal

agency’s response to a small business com-

ment, ONO determines whether the

agency addressed the small business’s con-

cern in a sincere and comprehensive man-

ner. ONO expects agencies to steer clear

of formulaic, “one-size-fits-all” responses

to the seven required questions and in-

stead provide thoughtful answers that

Agency Resolves toImprove Timeliness

The Federal Aviation Adminis-

tration has been consistently

late in its responses to com-

ments. The Department of

Transportation took action, ar-

ranging to track responses

due from FAA through the

agency’s Deputy Chief Coun-

sel, to ensure that the com-

ments get the high-level at-

tention they need and in a

more timely fashion. The first

comment he received was re-

sponded to within 10 days,

and response time in general

has been reduced.

show genuine consideration of the issues

raised. Further, Federal agencies earn le-

gitimacy when their high-level executives

review and approve the response rather

than merely provide a signature. ONO

also “rewards” agencies that propose alter-

natives to fines and penalties, including

offers of reductions or waivers, notice of

compliance education or assistance, and

means of working more cooperatively in

the future with small business concerns.

In other words, response quality can mean

showing flexibility by offering a compro-

mise or remedy to the concern raised;

proposing a means to avoid future prob-

lems; or denying the relief sought while

providing a thorough and thoughtful an-

swer to the concern—even if it’s not what

the small business wants to hear. The fol-

lowing examples illustrate the point:

■ The majority of IRS responses come

from its TAS, whose mission is to re-

solve taxpayer issues at the point of

first contact and recommend changes

that will prevent problems in the fu-

ture. Frequently, TAS representatives

attending Hearings will help

commenters resolve their issues on the

spot. TAS stresses quality of response in

its dealings with small business.

■ In 24 days from the time it received

the forwarded comment from ONO,

the National Credit Union Adminis-

tration (NCUA) Executive Director re-

sponded to a small credit union’s com-

plaint that NCUA improperly denied

its request to expand its field of mem-

bership. While the response was not

Table 2-2. ONO RatingRationale for Timeliness

Days Rating

0–20 A

20–30 A-

31–40 B+

41–55 B

56–60 B-

61–70 C+

71–85 C

86–90 C-

91–100 D+

101–115 D

116–130 D-

Over 130 F

13

SBA National Ombudsman2004 Report to Congress

34

93

1

117

32

50

42

43

42

258

41

23

46

71

91

79

24

1

23

79

29

30

19

13

154

66

46

125

30

24

70

231

24

11

29

29

20

49

72

27

51

27

107

Department of Commerce

Department of Energy

Department of State

Department of Veterans Affairs

DOD/Defense Contract Management Agency

DOD/Dept. of the Army/US Army Corps of Engineers

DOI/Bureau of Land Management

DOI/National Park Service

DOI/United States Geological Survey

DOJ/Bureau of Alcohol, Tobacco, Firearms, & Explosives

DOJ/Bureau of Prisons

DOJ/Office of Consumer Litigation

DOL/Mine Safety and Health Admin.

DOL/Occupational Safety and Health Admin.

DOL/Wage and Hour

DOT/Federal Aviation Administration

DOT/Federal Highway Administration

DOT/Federal Motor Carrier Safety Administration

DOT/Research and Special Programs Administration

Environmental Protection Agency

Equal Employment Opportunity Commission

Federal Communications Commission

Federal Energy Regulatory Commission

Federal Trade Commission

General Services Administration

HHS/Centers for Medicare and Medicaid Services

HHS/Food and Drug Administration

Homeland Security/Citizenship & Immigration Services

Homeland Security/Coast Guard

Homeland Security/Customs Service

Housing and Urban Development

Internal Revenue Service

National Credit Union Administration

National Labor Relations Board

National Science Foundation

Securities and Exchange Commission

Small Business Administration

USDA/Agricultural Marketing Service

USDA/Animal and Plant Health Inspection Service

USDA/Food and Nutrition Service

USDA/Food Safety Inspection Service

USDA/Foreign Agricultural Service

USDA/Forest Service

Figure 2-4. Federal Agencies’ Response to Comments: Average Number of Days

“Outside the beltway, there

is no reason why anyone

needs to know the

distinction between our

offices… Regardless of

which face it is, it is the

U.S. Government and it is

seamless to outsiders.

Agencies are responding in

a top-down manner to the

President’s message that

small business matters.”

—Tom Sullivan, Chief

Counsel, SBA Office of

Advocacy

14

SBA National Ombudsman2004 Report to Congress

Figure 2-5. Growth inNumber of Agency Non-Retaliation Policies

22

32

14

2004

2002

2003

the one hoped for, it nonetheless ad-

dressed the questions posed in ONO’s

letter and the specific comments made

by the small credit union. It included a

detailed review of the facts supporting

the decision by the appropriate super-

visory region and the subsequent deci-

sion by the NCUA Board to deny the

expanded field of membership. This il-

lustrates that a well-documented “no”

is better than no response at all or a

protracted “we’ll get back to you.”

Agency Non-RetaliationPolicies—Criterion 3

ONO stresses to agencies the importance

of adopting formal written non-retaliation

policies designed to prevent acts that pun-

ish a small business for complaining

about an agency action. Agencies are

heeding this advice. In FY 2004, 10 agen-

cies joined the growing list of those with

written policies—a great achievement and

a welcome trend (see figure 2-5 and table

2-3).

Agencies have various means of commu-

nicating their non-retaliation policies,

many posting them on agency websites.

USDA, with multiple sub-agencies, pub-

lishes its non-retaliation policies on indi-

vidual program websites. For example, the

policy for USDA’s FSIS is posted to the

agency’s Small and Very Small Plant Out-

reach home page, with links to materials

and other resources for small and very

small plants. The site includes a link to

the Small Business Protection Laws and

the National Ombudsman’s website. Ex-

amples of other written non-retaliation

policies agencies have put in place follow:

■ The U.S. Coast Guard distributed its

non-retaliation policy through an

“ALCOAST” message from the Judge

Advocate General. The policy is also

the subject of several intranet site links.

Further, the Coast Guard’s new

manual governing its principal regula-

tory activities makes it clear that before

a new regulation takes effect, the

agency’s SBA liaison officer must re-

view and approve it as being in com-

pliance with policies, including the

non-retaliation policy, which is men-

tioned by name.

■ The U.S. Customs and Border Protec-

tion non-retaliation policy, included in

agency training materials for employ-

ees, states in part:

This agency strictly forbids retaliatory acts

by its employees. As such, you should feel

confident you will not be penalized for

expressing your concerns.

■ IRS has taken a number of steps to

prevent retaliation and has policies in

place to deal with it effectively should

it happen, including the mandatory

termination of IRS employees for spe-

cific instances of misconduct.

■ NCUA references its non-retaliation

policy on the cover page of every ex-

amination report given to a credit

union as part of what to do if the

credit union disagrees with the report:

Any retaliation by NCUA staff against a

credit union making any type of appeal

will subject the employee to appropriate

disciplinary or remedial action by the ap-

propriate supervisor. Such disciplinary or

remedial action may include oral or writ-

15

SBA National Ombudsman2004 Report to Congress

Table 2-3. Agencies Adopting Written Non-Retaliation Policies

ProposedIn FY 2002 In FY 2003 In FY 2004 for FY 2005

Agriculture Animal and Plant Health and Bureau of Industry and Security EducationInspection Service

Consumer Product Safety Commodity Futures Trading Centers for Medicare &Commission Commission Medicaid Services

Customs Federal Trade Commission Coast Guard

Equal Employment Opportunity National Aeronautics and CommerceCommission Space Administration

Federal Communications Occupational Safety and Environmental ProtectionCommission Health Administration Agency

Federal Deposit Insurance Corporation Small Business Administration Health and Human Services

Food and Drug State Department Housing and UrbanAdministration Development

Interior Veterans Affairs Justice

Internal Revenue National Oceanic andService Atmospheric Administration

Labor National Science Foundation

National Credit Union Administration

Pension Benefit GuarantyCorporation

Securities and Exchange Commission

Transportation

ten warning or admonishment, repri-

mand, suspension, or separation from

employment; change in assigned duties;

or disqualification from a particular as-

signment, including prohibition from

participating in any examination of the

credit union that was the subject of the

retaliation.

■ The Department of Transportation re-

iterated its non-retaliation policy

(DOT Policy on the Rights of Small

Entities to Enforcement Fairness) in a

Department-wide memo that directed

DOT agencies to re-disseminate the

policy through multiple channels to

frontline inspectors and enforcement

and compliance personnel, and to their

regulated industries, especially small

entities.

Agency RegulatoryEnforcement ComplianceAssistance—Criterion 4Agencies responded in a variety of creative

ways to this rating criterion, which looks

not only at the types of regulatory en-

forcement compliance options made

available to small businesses, but at

whether the compliance information is

easy to find and access. This criterion also

examines evidence of how the information

is getting out and whether agencies have

complied with SBREFA requirements to

provide compliance assistance education

(see sidebar, next page, for success story).

Agencies engaged in multiple efforts to

provide this education and assistance, in-

cluding reaching out to Native American

food safety workers and operators of

16

SBA National Ombudsman2004 Report to Congress

slaughtering and processing facilities in

several western States and meeting with

Alaskan Native reindeer herders on pro-

cessing and distributing their products.

Agencies collaborated with universities to

hold Roundtable meetings and work-

shops; offered multimedia training

courses to regulated businesses; attended

trade association meetings; and made an

array of resources available on their

websites and as part of inspections, semi-

nars, classes, symposia, conference calls,

and other outreach.

ONO encourages flexible policies that al-

low small businesses to make a good faith

effort to comply with rules and regula-

tions, and rewards compliance assistance

efforts that enlarge understanding and are

not just an empty exercise to fulfill a re-

quirement. For example, the U.S. Coast

Guard offers commercial fishing vessels

free dockside examinations to assess their

compliance with Coast Guard require-

ments. If discrepancies are found, a “work

list” is prepared for the vessel, but no cita-

tion is issued.

Here are other select agency examples:

■ USDA’s Agricultural Marketing Ser-

vice (AMS) launched a new interactive

CD to be distributed to clients

through trade shows, cooperative ex-

tension service educational programs,

and State Departments of Agriculture.

The CD provides complete informa-

tion on the Federal Pesticide

Recordkeeping regulation and how to

keep restricted-use pesticide records

properly.

Proactive Agency EffortMakes for Small Business

Compliance

When a small plant in Louisi-

ana, which made a ready-to-

eat product, failed an inspec-

tion because of the presence

of a pathogen, Food Safety

and Inspection Service and

university experts met with

the establishment and in-

structed them on ways to get

rid of it. The plant followed

through on these recommen-

dations and submitted an ac-

tion plan, allowing it to re-

sume operations. A follow-up

inspection revealed that the

pathogen had been elimi-

nated. According to FSIS, “The

success of the plant in eradi-

cating the pathogen from the

facility may be directly linked

to the SBREFA information

provided by FSIS personnel

and the assistance provided

by the university involved.”

The company went from

blaming the government to

thanking FSIS for putting it in

touch with the experts who

helped it resolve a food safety

problem.

■ AMS’s Fruit and Vegetable Program

uses 34 marketing order administrative

committees to actively communicate

with all small businesses regulated un-

der marketing orders. The committees

explain the requirements and issue pe-

riodic informational packages written

in plain English to keep handlers in-

formed of public meetings, current

and proposed regulatory requirements,

and compliance procedures.

■ USDA’s FSIS holds workshops

throughout the country and uses Web

casting to reach a greater number of

people. The agency has continued to

conclude cooperative agreements with

universities to provide small and very

small plants with a more in-depth un-

derstanding of Hazard Analysis and

Critical Control Point (HACCP) sys-

tems and emerging food safety con-

cerns. During FY 2004, the following

activities took place:

– Fifteen universities conducted ap-

proximately 75 HACCP and food

safety training classes across the

country, up from 52 in 2003. Ap-

proximately 2,065 people attended.

– Five workshops held in 2004 ex-

plained new rules designed to pre-

vent human exposure to “mad cow”

disease and to E. coli O157:H7 bac-

teria. Approximately 1,594 people

attended the workshop.

– Ten food safety seminars and work-

shops, coordinated with the New

Mexico Livestock Board, were held

as part of continued outreach to

Native American food safety work-

17

SBA National Ombudsman2004 Report to Congress

ers and operators of slaughtering fa-

cilities throughout the West. Easy-

to-understand workbooks were

distributed to participants. The

workshops had about 500 attend-

ees.

■ Both bureaus within the Department

of Commerce that regulate small busi-

ness activities—the National Oceanic

and Atmospheric Administration and

the Bureau of Industry and Security—

conduct vigorous outreach initiatives

aimed at educating small businesses

about their programs. Additionally,

both agencies provide their enforce-

ment agents with training on RegFair

issues so they may better respond to

small business concerns and provide

information about their right to regu-

latory fairness.

■ CPSC recently reviewed its Small Busi-

ness Ombudsman Program, which it

has as a strategic goal, and modified its

website to promote small business ser-

vices, including listing the National

Ombudsman email address on CPSC’s

home page contact information. CPSC

also provides compliance assistance at

business- and industry-sponsored

events held to discuss product safety

guidelines and regulatory requirements

relevant to products under the agency’s

jurisdiction, such as flammability stan-

dards for upholstered furniture.

■ EPA uses multiple mechanisms to pro-

vide environmental compliance assis-

tance to small business. These include

voluntary programs, toll-free hotlines,

newsletters, Internet sites, training,

Agency-StatePartnerships Increase

Outreach to SmallBusinesses

The EEOC Seattle District Of-

fice partnered with the Wash-

ington State Human Rights

Commission to present 11

workshops designed to edu-

cate small businesses about

both agencies’ laws. The

workshops were presented in

10 cities in Washington State

to more than 250 business

representatives. At one work-

shop, a small business partici-

pant learned that posting a job

vacancy for a “female” nurse

may be a violation of the law

and, as a result of the train-

ing, decided to change the job

announcement and thus avoid

a potential charge of discrimi-

nation.

pollution prevention education, facility

compliance histories, and industry-spe-

cific and general environmental guides.

EPA has more than a dozen links on its

home page to sites offering compliance

assistance.

■ EEOC provides no-cost outreach and

education programs as well as fee-

based training and technical assistance.

Updated fact sheets, brochures, and

enforcement guidance are available

through the website and through

EEOC’s publication center for no

charge. In FY 2004, the agency contin-

ued to increase the number of out-

reach, education, and compliance assis-

tance activities targeted to the small

business community, conducting 651

events that reached 20,836 small busi-

ness representatives and their employ-

ees—a 45 percent increase over last

year (see sidebar for related success

story).

■ IRS has an interactive Small Business

Tax Workshop that includes all of the

materials used in the classroom work-

shops taught by IRS partner organiza-

tions, including streaming video work-

shops online at www.irs.gov/smallbiz.

IRS recently launched a Spanish-lan-

guage version of the workshop, which,

like the English version, provides com-

pany startups with the tax “nuts and

bolts” of organizing their businesses.

Additionally, “Tax Talk Today,” a

monthly program about current tax is-

sues and policies, features a panel dis-

cussion, questions and answers from

viewers, current tax news stories, and

“tax teasers.” The format allows viewers

18

SBA National Ombudsman2004 Report to Congress

to ask questions via email, fax, or tele-

phone (www.taxtalktoday.tv/).

■ IRS has undertaken an aggressive

compliance assistance program to

help taxpayers and improve compli-

ance with tax laws. First, it has built a

multidimensional education program

to increase understanding of the tax

code and its major provisions. This

instruction is targeted at new small

businesses, the largest share being

those started by women and mem-

bers of ethnic minority groups. All of

this material is available at IRS’s com-

prehensive website, which features

10,000 pages of information and

video instruction and receives 1.2

million visitors each month. An Of-

fice of Taxpayer Burden Reduction

program continues to work on sys-

temic changes to make it easier for

taxpayers to comply with the tax code

(see sidebar for related success story).

■ The Department of Justice’s Americans

with Disabilities Act (ADA) technical

assistance program promotes voluntary

compliance with ADA by providing

free information and assistance to af-

fected individuals and entities. This

program is the principal means by

which the Department meets its

SBREFA obligation to provide regula-

tory compliance information to small

entities. Each year, the program assists

more than 1 million people. A main

component of the program is the ADA

Information Line, a 24-hour telephone

line that provides ADA public infor-

mation and educational materials. The

IRS Continues NovelEfforts to Inform Small

Businesses on Tax Issues

After completing a detailed

analysis of more than

300,000 questions that came

in through its Referral Mail

system during the 2004 sea-

son, IRS identified the 26

highest volume question

groups and is now creating a

website based on these really

frequently asked questions to

help small businesses find the

answers they need without

having to call an 800 number.

The goal is to get the right in-

formation to the right people

at the right time.

public may also use the ADA home

page to locate Department letters re-

sponding to specific ADA-related

questions. The website received 1.3

million visitors in FY 2004.

■ The Pension Benefit Guaranty Corpo-

ration uses alternative dispute resolu-

tion to achieve consensual resolution

of issues in controversy, including

compliance and enforcement matters.

■ DOT agencies provide toll-free tele-

phone assistance and information cen-

ters to answer questions on regulatory

requirements. For example, the

Research and Special Programs

Administration’s Office of Hazardous

Materials Safety answers questions via

its Information Center, a toll-free line

dedicated to answering questions from

entities, including small entities, on

regulatory requirements. FAA provides

small entities with a compliance assis-

tance hotline. Other DOT agencies of-

fer interactive assistance, taking ques-

tions on certain programs and

providing answers through their

Internet sites. All agencies allow com-

ments on their rulemakings to be sub-

mitted via the Internet.

■ When DOL updated its overtime pay

regulations, it launched an innovative

outreach effort to help employers and

employees understand the changes.

DOL’s Overtime Security Advisor

(www.dol.gov/elaws/overtime.htm) is a

free, interactive Web-based tool that al-

lows users to apply the updated rules

to their specific employment situation.

The FairPay website (www.dol.gov/esa/

19

SBA National Ombudsman2004 Report to Congress

IRS Offers a Helping Handat Hearing

A small business comment

was filed in response to sub-

stantial fines it received for al-

legedly submitting incorrect

taxpayer identification num-

bers (TINs) reported on IRS

1098 and 1099 forms. The

company prepares a large

number of forms for its cli-

ents. IRS was slow in re-

sponding to inquiries, instead

fining the company for incor-

rect information. However, fol-

lowing testimony at the ONO

Hearing conducted by video

from Spokane, Washington,

on July 26, 2004, the IRS Tax-

payer Advocate Service

agreed to authorize the com-

pany access to the IRS e-ser-

vices TIN matching utility so

the company could verify tax-

payer ID numbers before sub-

mitting reports, thereby avoid-

ing fines of $3,100 for

incorrect TIN information.

regs/compliance/whd/fairpay/

main.htm) provides training videos,

fact sheets, and PowerPoint presenta-

tions so that America’s businesses can

learn about the new rules at their con-

venience—a benefit particularly help-

ful to small businesses. These efforts,

along with seminars that DOL held

across the country, reflect the agency’s

commitment to helping employers un-

derstand the employment regulations

affecting their businesses.

Agency Participation inRegFair Hearings—Criterion 5

Each year, agencies increase their partici-

pation at ONO RegFair Hearings. Several

agencies, including IRS, DOL, SBA, and

now USDA’s FSIS, demonstrated their

commitment to send at least one repre-

sentative to all Hearings to listen to small

business issues and concerns or to make

brief presentations—or just to ensure

their presence in the small business com-

munity. Some agencies, such as Customs

and Border Protection and DOT, work to

ensure attendance at those Hearings

where an issue related to their agency is

on the agenda. At RegFair Hearings, agen-

cies can market themselves and establish

ongoing relationships with trades. Federal

agency representatives who attend can

also help resolve small business issues on

the spot, particularly if regional represen-

tation is also present (see sidebar).

After a Hearing site is selected, ONO calls

the relevant District Director in the field,

who begins the process of putting in place

whatever is needed for a specific event, in-

cluding identifying issues that small busi-

nesses will raise and engaging various me-

dia and outreach vehicles. Identified

agenda issues are then uploaded to

ONO’s website calendar for all to see in

advance of the Hearing. With advance

notice, agencies are able to send the most

appropriate representatives to respond to

particular concerns and foster a spirit of

collaboration with small business. Agen-

cies consistently ask for more notice when

an issue relevant to them will be on the

agenda. ONO has agreed to make ad-

vanced planning and notification of agen-

cies a priority—to ensure their continued

attendance at its RegFair Hearings.

In FY 2004, nearly 30 agencies and sub-

agencies attended ONO RegFair meetings

(see table 2-4 for breakdown).

Agency Notice to SmallBusinesses of Violations andRight to Comment—Criterion 6

Last year, ONO rated agencies for the

first time on the extent to which they in-

formed small businesses of alleged viola-

tions and of their right to comment to the

National Ombudsman. ONO encourages

agencies to go beyond simply publishing a

toll-free number or posting regulations in

the Federal Register. Instead, agencies

should strive to be accountable for their

enforcement actions and cognizant of the

need for small businesses to have compli-

ance information up front and in plain

form. While more than half of the agen-

cies rated received an “A” in FY 2004 for

their efforts to inform small businesses

about SBREFA and the National

Ombudsman’s Office, improvement is

needed in addressing this criterion.

20

SBA National Ombudsman2004 Report to Congress

Examples of Federal agencies that regu-

larly integrated information about regula-

tory enforcement fairness as part of their

interactions with small businesses follow:

■ When the USDA’s FSIS assesses small

and very small establishments, it holds

a meeting with the owner during

which it explains SBREFA resources

and avenues of support. At the

Agency

Agriculture ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Food Safety and Inspection Service ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Forest Service ✓

Army Corps of Engineers ✓

Commerce ✓ ✓

Environmental Protection Agency ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Equal Employment Opportunity Comm. ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Federal Communications Comm. ✓

Federal Trade Commission ✓

Health and Human Services ✓

Centers for Medicare & Medicaid Svcs ✓ ✓

Food and Drug Administration ✓

Homeland Security

Coast Guard

Customs and Border Patrol ✓ ✓ ✓

Interior

Bureau of Land Management ✓

Fish and Wildlife Service ✓

Internal Revenue Service ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Labor ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Occupational Safety & Health Admin. ✓ ✓ ✓ ✓ ✓ ✓

Mine Safety and Health Administration

Wage and Hour Division ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Small Business Administration ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Transportation ✓

Table 2-4. Breakdown of Agency Attendance at ONO Regfair Hearings, 2004

Phoe

nix,

AZ

Wilm

ingt

on, D

E

Ann

apol

is,

MD

Sac

ram

ento

, CA

Atl

anta

, G

A

New

Orle

ans,

LA

Sta

mfo

rd, CT

St.

Lou

is, M

O

Mad

ison

, W

I

Yonk

ers,

NY

Lans

ing,

MI

Orla

ndo,

FL

Roc

hest

er,

MN

Col

umbu

s, O

H

Des

Moi

nes,

IA

Bill

ings

, M

T

Sea

ttle

, W

A

Sal

em, O

R

meeting’s close, inspectors leave man-

agement with a SBREFA pamphlet, list

of contacts, and other information and

websites to help with food safety issues

and any impending enforcement ac-

tions discussed during the meeting.

This has been effective in linking estab-

lishments with university outreach pro-

grams and in bringing them into com-

pliance.

21

SBA National Ombudsman2004 Report to Congress

Impact!

“EPA was able to raise its

grade for attendance at

RegFair Hearings in large part

due to the cooperation and

assistance of the various SBA

Hearing contacts in regional

offices. These individuals

were unfailingly helpful in as-

sisting EPA to determine

whether a comment regarding

an EPA enforcement matter

was likely. Based on this infor-

mation, the agency was able

to send a knowledgeable rep-

resentative to the Hearing…

We recognize the value of un-

derstanding small businesses’

issues, many of which may be

applicable to EPA operations

even if the particular com-

ment is addressed to a differ-

ent Federal agency.”

—Walker B. Smith, Director,

EPA Office of Civil Enforce-

ment

■ At the start of a facility inspection,

FDA provides detailed information on

how to contact the National Ombuds-

man’s Office; the information is also

available on the FDA website.

■ The IRS publication, Your Rights as a

Taxpayer, available in English and

Spanish, states that small business enti-

ties can participate in the regulatory

process and can comment on IRS en-

forcement actions by calling 1-888-

REG-FAIR. IRS also distributes a

document that describes the SBREFA

process and includes the National

Ombudsman’s website, email address,

telephone number, and headquarters

address.

■ The National Labor Relations Board

(NLRB) recently added a link titled

“SBREFA” to its website, providing in-

formation about the National Om-

budsman and the right of small busi-

ness owners to file comments on

NLRB enforcement actions. Included

in this information is the toll-free

number and website for the National

Ombudsman’s Office.

■ In FY 2004, as part of the Department

of Homeland Security transition, Cus-

toms and Border Protection updated

legacy Immigration and Naturalization

Service procedures to include a

SBREFA Notice with all assessments

against parties for violation of immi-

gration law—previously, INS had not

complied with SBREFA notification

requirements.

■ In FY 2004, FAA embarked on a ma-

jor project to revise its Compliance

■ CPSC’s “How We Can Help You”

guide provides detailed information on

the mission of ONO’s 10 RegFair

Boards and their role in evaluating en-

forcement activities. Information in-

cludes the ONO toll-free RegFair

number, a toll-free CPSC hotline, con-

tact information for the CPSC Small

Business Ombudsman, and a contact

list of CPSC regional offices.

■ EEOC developed a letter to accom-

pany every charge filed against a small

business. The letter advises small busi-

nesses of the availability of small busi-

ness liaisons who provide compliance

assistance and help resolve questions

about the laws EEOC enforces and

about mediation and the charge pro-

cess. The letter also invites small busi-

nesses to visit the agency’s website,

which has a special place designed to

help small businesses. The letter states

that any request for assistance will not

adversely affect investigation of the

charge filed.

■ Community outreach conducted by

Commerce’s Community-Oriented

Policing and Problem Solving program

includes providing guidance on a vari-

ety of regulatory issues affecting small

entities. Guidance is provided

through nationwide industry work-

shops, town hall meetings, and tem-

porary help lines. A select group of en-

forcement officers leads proactive

compliance efforts in each region, but

all agents and officers complete train-

ing in community policing philoso-

phies and problem-oriented policing

strategies.

22

SBA National Ombudsman2004 Report to Congress

and Enforcement program. A revised

order reiterates fairness guidance to

agency enforcement personnel and ad-

vises them to continue to enclose the

following in every Notice of Proposed

Civil Penalty or penalty letter to a

small entity: a statement informing the

small entity of its right to contact the

National Ombudsman, the National

Ombudsman’s phone number and

website, notice that FAA strictly for-

bids retaliatory acts by its employees,

and assurance that small entities can

feel confident in expressing their con-

cerns without penalty.

Responding to FederalMandates: Small BusinessPaperwork Relief Act—Criterion 7

SBPRA imposes a variety of requirements

on agencies and on the Office of Manage-

ment and Budget (OMB) as part of ef-

forts to further reduce paperwork require-

ments for businesses with fewer than 25

employees and to establish a “point per-

son” or contact within the agency to serve

as a liaison for small businesses seeking

regulatory information (see sidebar for

other requirements of the Act). OMB

maintains the list of single points of con-

tact on its website.

These efforts should help alleviate the ap-

proximately 8.2 billion hours and $320

billion annually that it costs businesses

and citizens to collect and submit data to

the Federal Government. These estimates

by OMB reflect data submitted by the

collecting agencies and may actually un-

derestimate the real public burden im-

The Small BusinessPaperwork Relief Act of

2002—What it Does

This law institutes a process

to make Federal agency pa-

perwork reduction for small

business a serious, ongoing

effort. The law:

� Requires OMB to publish

an annual list of compli-

ance assistance resources

available to small busi-

nesses in the Federal Reg-

ister and on the Internet.

� Requires each Federal

agency to establish one

point of contact to act as a

liaison for small busi-

nesses and to make ef-

forts to further reduce pa-

perwork requirements for

businesses with fewer than

25 employees.

� Establishes an interagency

task force to recommend

improvements in informa-

tion collection and dissemi-

nation.

� Requires agencies to re-

port on their enforcement

actions against small busi-

nesses and penalty reduc-

tions in such actions to

Congress and the Small

Business and Agricultural

Regulatory Enforcement

Ombudsman so that they

can monitor the regulatory

burden reduction efforts of

agencies.

posed, given the results of impact studies

by ONO and Advocacy, which show a

greatly disproportionate burden placed on

small businesses by Federal regulations.

ONO is working with OMB and its Of-

fice of Information and Regulatory Affairs

to help agencies comply with SBPRA,

collecting from agencies data reflecting

their compliance assistance. ONO is re-

viewing the data it has received to date

and the dollar amount of savings to small

businesses being generated as a result of

SBPRA (see sidebar next page for ex-

ample). It is noteworthy that for FY

2003—when Federal agencies started

their SBPRA reporting—and FY 2004

combined, the total monetary amount of

civil penalty abatements, reductions, or

waivers reported by agencies was nearly

$3.9 billion.

According to the Act, Federal agencies

were to have established a baseline by

December 31, 2003, and to measure

and report against the baseline by De-

cember 31, 2004. Each agency was to

report to the House Small Business

Committee, the House Committee on

Government Reform, the Senate Com-

mittee on Small Business and Entrepre-

neurship, the Senate Committee on

Governmental Affairs, and the National

Ombudsman the following informa-

tion:

■ Number of enforcement actions in

which a civil penalty is assessed.

■ Number of enforcement actions in

which a civil penalty is assessed against

small entities.

23

SBA National Ombudsman2004 Report to Congress

Agencies WaiveEnforcement Penalties forRecord Savings to Small

Businesses

In 261 enforcement actions

against small entities, FAA re-

duced or waived 138 of them,

amounting to $1.29 million in

savings for small entities. All

DOT agencies together re-

duced or waived over $4 mil-

lion worth of enforcement ac-

tions. IRS reported $1.7

billion in reductions and waiv-

ers for small entities.

■ Number of enforcement actions in

which the civil penalty is reduced or

waived for all and small entities.

■ Total monetary amount of the reduc-

tions for all and small entities.

Beginning in FY 2004, ONO rated agen-

cies on the extent to which they complied

with the SBPRA requirements in terms of

timely submission of reports. The ratings

reflect only whether agencies have submit-

ted the required data to ONO in a timely

manner.

■ Reports received up to 30 days late:

a one-grade reduction

■ Reports received up to 60 days late: a

two-grade reduction

■ Reports received up to 90 days late: a

failing grade

Agencies were also expected to establish a

task force to study the feasibility of

streamlining requirements and enabling

electronic collection and dissemination of

information. Agency rule reviews con-

ducted under the Regulatory Flexibility

Act prompt agencies to consider whether

particular rules or industry guidance is

still needed and whether changes should

be made to simplify, reduce, or adjust re-

quirements.

Select Best Practicesof Federal RegulatoryAgenciesONO helps foster an overall environment

of success for small businesses by engaging

Federal agencies in fully considering the

impact and implications of regulatory en-

forcement actions. The following initia-

tives illustrate best practices by Federal

agencies in addressing their SBREFA re-

sponsibilities and in changing their ap-

proaches to working with small busi-

nesses. These initiatives represent some of

the positive changes occurring in the Fed-

eral regulatory environment.

■ EEOC has designated small business

liaisons in its field offices who provide

compliance assistance, serve as a cus-

tomer referral resource, and help small

employers with concerns about dis-

crimination charges. Small businesses

can raise concerns with liaisons about

the length or scope of an investigation

or any other matter involving the han-

dling of a charge; liaisons have the

knowledge and authority to provide an

effective response.

■ The Federal Deposit Insurance Corpo-

ration (FDIC) has a compliance assis-

tance employee available for each of its

regulated institutions. At the regional

and territory office levels, senior staff

are assigned to a specific bank as the

single point of contact for that institu-

tion. In addition, subject matter ex-

perts are available at the regional and

Washington, D.C., offices to answer

questions in more technical areas.

FDIC also has a Banker Outreach Pro-

gram where senior FDIC staff contact

and meet with bank management to

discuss new technologies, product in-

novations, and recent statutory changes.

■ EPA manages a National Environmen-

tal Compliance Assistance Clearing-

24

SBA National Ombudsman2004 Report to Congress

house (www.epa.gov/clearinghouse) as

a guide to compliance information on

the Internet. This site offers compre-

hensive links to EPA environmental

compliance assistance materials, as well

as materials from all 50 States and

other organizations. The clearinghouse

contains many features that allow small

businesses to interact directly with EPA

and improve communication and col-

laboration among compliance assis-

tance providers. It also contains infor-

mation on current EPA compliance

and enforcement priorities that may af-

fect small business. Through this plat-

form, EPA funds State-by-State envi-

ronmental compliance information of

interest to small business

(www.envcap.org/).

■ IRS participates 100 percent of the

time in RegFair Hearings and meet-

ings—and not just when issues related

to its mission are presented in testi-

mony. The Hearings provide an oppor-

tunity both to resolve any issues that

do come up and to promote its Tax-

payer Education and Communication

products and services. DOL, SBA, and

FSIS also regularly participate in ONO

RegFair Hearings through field office

representation, which often allows for

an immediate response by the Federal

agency to an issue raised.

■ On June 24, 2004, the Federal Com-

munications Commission (FCC) insti-

tuted a new agency-wide “compliance

EPA CoordinatesConsortia to Further

Compliance Assistance

In 2005, the National Compli-

ance Assistance Providers Fo-

rum, the National Pollution

Prevention Roundtable, and

the Performance Track Partici-

pants Association are joining

together to showcase nation-

wide innovations in pollution

prevention, compliance assis-

tance, and environmental

leadership. This effort is part

of EPA’s continued coordina-

tion of compliance assistance

programs both inside and out-

side the Federal Government.

For more information, see

www.environmentalsummit.org.

guides” program to assist small entities.

The guides are focused on explaining

to small entities, in plain language,

what the agency requires of them with

respect to complying with new FCC

rules. Guides are posted on the FCC

website at www.fcc.gov/ocbo/

complianceguides.html. This program

goes beyond the former Fact Sheets

program in that it tailors guidance spe-

cifically to small entities, which the

FCC Chairman stated “are an essential

part of the digital migration and the

national broadband future.”

■ In 2004, DOL launched its Partner-

ship for Compliance Assistance Pro-

gram as a means of providing employ-

ers with the information they need to

comply with Federal employment laws.

Since the program’s inception, DOL

has signed formal partnership agree-

ments with eight membership organi-

zations and trade associations. These

agreements have enabled DOL to

reach more than 125,000 businesses

across all industries and regions of the

country through newsletters, articles,

speeches, website links, conference

calls, and seminars via the Internet.

Working in collaboration with these

organizations and associations—in-

cluding those whose members are pre-

dominantly small businesses—DOL

gives employers the information they

need to comply with Federal labor and

employment laws.

25

SBA National Ombudsman2004 Report to Congress

3Hearing the Voice of Small Business:Comments Filed

“It’s nice to have a friend in

government instead of an

adversary in government,

and the Office of Advocacy

and the National

Ombudsman’s Office have

been nothing but a friend to

small businesses that we

have referred to them.”

—Leo Blais, RegFair Board

Region I Chair

In FY 2004, ONO received many com-

ments through its RegFair Board mem-

bers’ advocacy efforts on behalf of the

small businesses in their regions. Through

Hearings and Roundtables, trade associa-

tion meetings, small business forums, and

other avenues of outreach, ONO heard

the concerns of small businesses across the

country. This section examines several of

these recurring themes and perceptions,

which include the high cost of compli-

ance, costly agency errors, confusing and

changing regulations, overly rigorous re-

quirements, and a generalized fear on the

part of small businesses of doing the

wrong thing.

Several of these concerns were reflected in

testimony at ONO Hearings and Round-

tables and in actual comments received

from small businesses in FY 2004. Small

business owners expressed concerns not

only about difficulty in complying with

regulations but about the extraordinary

effort it takes to resolve conflicts stem-

ming from misapplied or overly technical

requirements—effort that costs them

valuable time away from their businesses.

Small businesses still complain about ex-

cessive audits and inspections and of

spending too much time on administra-

tive tasks related to regulation. Cost is a

major issue as well, and is the main reason

small businesses get embroiled in what is

often a protracted and time-consuming

volley with the Federal Government.

Long delays when trying to correct a

problem are a common concern. ONO

continued to work in FY 2004 to help

Federal agencies better understand the ef-

fects of their enforcement actions on

small businesses, given small companies’

limited resources and vulnerability to

costly penalties and time-consuming pa-

perwork. Indeed, sometimes their very

survival is at stake. Examples of concerns

heard in FY 2004 are described in this

section.

The High Cost ofComplianceThe cost of regulatory compliance is high.

As previously mentioned, Federal regula-

tions alone cost small businesses with

fewer than 20 employees $6,975 a year

per employee—60 percent more than it

costs firms with more then 500 employees

to comply with Federal regulations.1 Also,

small firms spend twice as much on tax

compliance as do larger firms (see table

3-1). When subject to audits or other

1W. Mark Crain and Thomas D. Hopkins, “TheImpact of Regulatory Costs on Small Firms”(Washington, DC: SBA Office of Advocacy,2001).

26

SBA National Ombudsman2004 Report to Congress

regulatory processes, small businesses gen-

erally must take time, energy, and atten-

tion away from their businesses in order

to comply. Unlike large companies that

can afford to hire staff to respond to au-

dits and inspections, many small business

owners must take on this additional bur-

den themselves. Said one commenter in

testimony at the New Orleans Hearing:

“Being a small business makes it virtually

impossible to handle this matter in any

other financially sound way.” He noted

that by handling the matter on his own,

he is losing time and profits.

The National Ombudsman’s Office works

hard to counter these costs for small busi-

nesses. According to its FY 2004 eco-

nomic impact analysis prepared by Jack

Faucett Associates, ONO saved small

businesses at least $19.7 million in 2003.2

Further, interviews with business owners

and trade associations conducted as part

of the analysis indicate that small busi-

Table 3-1. Cost of Federal Regulations by Firm Size (per Employee,All Sectors)

Cost ($) per Employee for Firms with:Type of Regulation < 20 Employees 500+ Employees

All Federal regulations 6,975 4,463

Environmental 3,328 717

Economic 1,616 2,485

Workplace 829 698

Tax compliance 1,202 562

Source: W. Mark Crain and Thomas D. Hopkins, “The Impact of RegulatoryCosts on Small Firms” (Washington, DC: SBA Office of Advocacy, 2001).

nesses place an annual value on ONO’s

services at between $93 and $250 per

business, or $65 million to $130 million

in total. This impact includes direct sav-

ings to small businesses as a result of

ONO comments and the benefits that

small businesses glean from learning of

ONO success stories and having a more

small business friendly regulatory enforce-

ment environment. Taking a cost-benefit

view of this impact, the cost-benefit ratio

relative to ONO services ranges between

46 and 124—i.e., every dollar invested in

ONO yields a return of between $46 and

$124 in benefits to small business. There-

fore, accessing ONO’s services can be a

strategic decision for a small business

seeking relief from excessive regulatory en-

forcement burdens.

The enforcement environment frequently

presents difficult options for Federal agen-

cies as well as for the small businesses they

are charged with regulating. For example,

even when a government agency makes a

legitimate effort to mitigate penalties by

offering a settlement or reduction, the

modified amount may still be relatively

“expensive” for a small business. Addi-

tionally, small businesses are often un-

aware of their options or are afraid to seek

recourse in their interactions with govern-

ment, even when they feel penalties are

unreasonable. In an online comment filed

by a small Texas paint company that was

fined $2,150 for registration violations,

the commenter wrote, “My argument is

not one of innocence, but of what is rea-

sonable and fair.” He continued by noting

that he was afraid to ask for a hearing, be-

lieving it would subject his company to

2All dollar figures in this paragraph are fromJonathan Skolnik and Paul Nguyen, “Saving SmallBusiness from Excessive Enforcement: AnEconomic Impact Analysis of the Office of theNational Ombudsman” (Washington, DC: SBAONO, 2004).

27

SBA National Ombudsman2004 Report to Congress

the full guideline penalties, which had

been reduced by more than half, but were

still substantial to him. In cases like this,

the Federal agency feels it has made a

good faith effort to compromise, while

the small business still feels mistreated.

ONO can work to bridge the divide by

ensuring that the small business is heard

by the agency involved; something it did

this several times in FY 2004 (see above

sidebar for success story).

Costly Agency ErrorsAgency errors can compound hardship

for small businesses, especially when reso-

lution is unnecessarily delayed. These er-

rors and delays are not only frustrating

but can be extremely costly. ONO can be

helpful in breaking the stasis that occurs

between small businesses and Federal

agencies.

In a comment filed in FY 2004, an avia-

tion company complained of lost paper-

work relating to a lien on an airplane,

which was preventing its sale. According

to the comment, the lien was not re-

corded by FAA due to a technicality relat-

ing to one sentence requiring that a copy

be returned to SBA after release of the

ONO Helps Farmer Prevail in Tax Case

Hazelton Valley Farm, a Utah small business begun in Canada in 2000, lost money and was sold in 2002. The owner had a

Canadian tax liability that he was waiting to calculate and pay when he received notice from IRS that he had not filed his U.S.

taxes properly—even though he had lost money on his business venture. He submitted a comment to ONO on November

25, 2003, which was forwarded to IRS’s Taxpayer Advocate Office. It determined that reasonable cause had been estab-

lished, and the penalties were abated. ONO helped save this business over $4,600 and a lot of valuable time. The small

business’s account now shows a zero balance in money owed IRS.

ONO Helps Save SmallBusiness by Fixing Admin

Error

A pharmacy company in

Maine filed a comment regard-

ing delays in payments from

Medicare occurring as a result

of an address change. The

government agency—Centers

for Medicare & Medicaid Ser-

vices (CMS)—that needed to

record the address change

failed to do so, even after re-

peated requests, resulting not

only in non-receipt of benefits

but also a debt of $500,000,

which the small business

could not pay. This debt also

interfered with patient care, as

the company could not afford

to continue serving patients.

Once in receipt of the com-

ment, ONO forwarded it to

CMS, which responded in 30

days that a benefits adminis-

trator had been assigned to

expedite the situation. ONO

followed up with CMS and

confirmed that the planned

action had been taken.

lien. With ONO’s help, the lien was re-

leased by FAA, and the “black hole” into

which documentation sometimes falls was

illuminated. In an email to the National

Ombudsman, the aviation company’s

president wrote: “Once the Ombudsman

was notified of our problem, the issue was

resolved in a timely manner. Thank you

for your assistance.”

In another case, ONO helped facilitate

the recording of an address change, a

seemingly small matter that actually

helped save a business (see sidebar at right).

Confusing andChanging RegulationsSmall businesses sometimes feel that the

rules they must follow are challenging to

understand, which leads to difficulty in

complying—and to inadvertent non-

compliance. The upshot is often an un-

pleasant confrontation with the regulatory

agency looking only to enforce the rules.

To a small business—constrained by lim-

ited time and resources and the daily

stresses of business survival—having to be

accountable for complying with a rule it

does not even understand is the last straw.

The business owner often experiences re-

sentment and anger toward the regulatory

28

SBA National Ombudsman2004 Report to Congress

agency and a general feeling that the

agency is nit-picking or being capricious

in enforcing regulations. Said one

commenter, “I can say from experience

with [Federal Government] representa-

tives on my small cranberry farm in Mas-

sachusetts that they hold themselves above

the law and feel that they can make the

rules as they go along.”

ONO intervention can help parties arrive

at a mutual understanding even when

contentious issues have created a some-

what hostile environment. The following

describes one high-profile example from

FY 2004.

When the State boards of pharmacy re-

ceived a letter from FDA’s Center for Vet-

erinary Medicine in April 2004 announc-

ing a tightening of the guidelines on

compounding of drugs for use in animals,

the American Pharmacists Association,

along with the International Academy of

Compounding Pharmacists and the Na-

tional Community Pharmacists Associa-

tion, immediately wrote a joint letter in

reply. They strongly urged FDA to retract

its letter, calling the proposed guideline

and related enforcement action unreflec-

tive of the state of the practice and saying

it would “threaten the health and safety of

thousands of animal patients.” The letter

noted:

Perhaps most concerning about the

agency’s sudden change in interpre-

tation and enforcement of 21 CFR

530.13 is the lack of prior commu-

nication with the pharmacy and vet-

erinary professions and State regula-

tory agencies.

The three organizations that wrote the let-

ter represented thousands of compound-

ing pharmacist members nationwide. And

although the initial letter was not success-

ful with FDA, follow-on outreach efforts,

spearheaded by the RegFair Board Chair

in Region I and including an appearance

by the National Ombudsman at the Inter-

national Academy of Compounding

Pharmacists’ annual meeting, sparked a

successful ONO comment-filing cam-

paign to place this issue before FDA. As a

result, FDA—true to its expressed desire

to be responsive and “keep the lines of

communication open”—decided in No-

vember 2004 to review the guidelines,

subsequently revising them to reflect the

interests of small pharmacies.

Small businesses commonly feel that regu-

latory agencies do not try hard enough to

“get the word out.” In the case of a small

coating manufacturing plant, the owner

commented that he did not knowingly

violate EPA’s architectural coating regula-

tion but that he felt insufficient public

outreach was conducted to make him

aware of it. EPA responded that in this

case, it went beyond simply publishing

the regulation in the Federal Register and

also worked through the National Paint

and Coating Association, having found

trade associations to provide an efficient

and effective method of notifying the

greatest number of regulated entities. Un-

fortunately, the commenter’s company

did not belong to that particular associa-

tion. Acknowledging this fact, EPA as-

serted that while it agrees that special ef-

fort should be made to inform small

businesses of new regulations, the business

“We were very pleased to

see the FDA’s

responsiveness once

contacted by ONO and

Advocacy.”

—Leo Blais, Region I

RegFair Board Chair

29

SBA National Ombudsman2004 Report to Congress

itself needs to take some responsibility for

staying apprised of the rules that govern it.

ONO believes that by working coopera-

tively and leveraging compliance assis-

tance and information resources (includ-

ing Hearings) tailored to small businesses,

Federal agencies and small businesses alike

can foster better compliance and commu-

nication. Small businesses need to take

advantage of available compliance assis-

tance, and Federal agencies need to make

small business concerns a priority.

Overly RigorousRequirementsSmall businesses sometimes complain that

Federal agencies are overly exacting in

their application of requirements (e.g., in-

stituting fines for improper forms, enforc-

ing unnecessary training requirements for

personnel, etc.). The rigor demanded by

some agencies with regard to their regula-

tions can make for a situation where the

cost of compliance effectively puts the

“little guy” out of business. It is not sur-

prising then that frustration builds, espe-

cially when business is slow and cargo is

stuck on the docks, as was the case with

several commenters whose goods were

randomly intercepted for inspection and

then held up in a protracted process.

One commenter—a gourmet food im-

porter and distributor—testified at the

Yonkers, New York, Roundtable in 2004

that for his company, “the delay of a few

weeks results in lost revenues and shelf life

and makes it that much more difficult to

manage inventory levels.” He attributed

some of the delays to new customs inspec-

tors and testified that a shipment of

cheese had to be sent back to Italy because

a customs inspector was unfamiliar with it

and refused to issue a release without a

fuller description; the company had been

importing this cheese without incident

for years. Although frustrated, the

commenter felt satisfied that his griev-

ances were heard through the vehicle pro-

vided by ONO (see sidebar).

Sometimes, small businesses feel they are

being targeted, when it is more a matter

of being held to the “letter of the law” in

terms of regulatory enforcement. Unfor-

tunately, such rigor takes a heavier toll on

the small business person, who sometimes

feels marginalized by a system he does not

know how to navigate either to satisfy the

requirement or to get the help needed to

work out an alternative. Either way, a feel-

ing is created of “no one really cares.” One

small business owner, relatively new to

importing and unfamiliar with required

procedures, asked ONO’s help to keep

her $12,000 worth of earthenware plates

(a “small” import) from being destroyed.

Upon being notified that the shipment

had been detained, the commenter says

she did not receive a response from FDA’s

Dallas Southwest Import District Office

when she called asking how to handle the

detention. When she did receive a reply,

the commenter claims it was unhelpful,

leading her to observe that the govern-

ment agent seemed not to have time to

deal with such a small shipment.

ONO is committed to getting answers to

the concerns raised by small business

ONO Facilitates PositiveExchange with

Government Inspectors

At the Yonkers, New York,

Roundtable on April 28,

2004, a gourmet food im-

porter and distributor from the

Bronx complained of lengthy

government inspections at

ports of entry after 9/11 that

jeopardized the perishable

gourmet cheeses and other

specialty foods his company

imports. According to the

company’s vice president, re-

views that used to take a few

days were taking as long as

three weeks when a ship’s en-

tire cargo was x-rayed. While

he recognized the importance

of security measures in a

post-9/11 world, he believed

that better training of inspec-

tors on the products they ex-

amine would help prevent

needless delays. The small

business was pleased that its

grievances were listened to

and credits ONO for helping

facilitate a productive ex-

change. The Department of

Homeland Security later wrote

the company that it was trying

to expedite shipments and to

give preferential treatment to

perishable items, and that the

problems caused by inexperi-

enced inspectors have dimin-

ished as they learn on the job.

30

SBA National Ombudsman2004 Report to Congress

owners, so as not to leave them “hang-

ing,” wondering what they are supposed

to do next. Again, many times, just get-

ting an answer—even if it’s not the ideal

one—is what small businesses desire

most.

31

SBA National Ombudsman2004 Report to Congress

4ONO Outreach: Increased Use of SBA FieldOffices, RegFair Boards, and Technology

Board Activity Report:Supporting Artists in New

Mexico

A Region VI Board member,

who also owns a gallery and

framing business in Albuquer-

que, New Mexico, is working

to support more than 100 art-

ists and craftsmen pursuing

change in an IRS law that

states that if an artist donates

artwork to a charitable organi-

zation, the artist can only de-

duct the costs of materials

used in the artwork, rather

than the appraised value of

the work itself.

Regional RegFairBoards: ONO’s Eyesand EarsONO’s 10 RegFair Boards are its “eyes

and ears” across the country. They are the

main avenue through which ONO is able

to learn of particular small business regu-

latory enforcement concerns in various lo-

calities and to ensure that those concerns

are heard, as appropriate, by the Federal

agencies involved. RegFair Board mem-

bers are small business people themselves,

running a wide variety of small business

enterprises, from Christmas tree farms

and real estate companies to data manage-

ment and professional development firms.

In some cases, the board member’s busi-

ness engenders a personal commitment to

a particular struggle (see sidebar).

It is also through RegFair Board members

that greater access is gained to trade and

professional associations representing

blocks of small businesses with common

concerns and interests. By working with

trade organizations and giving them a

point of contact in the field—not a Fed-

eral agency but a small business person

like the ones they represent—ONO

RegFair Board members provide commu-

nication channels for productive problem

solving. For they can both direct small

businesses to ONO for redress of their

regulatory enforcement concerns as well

as report directly to ONO on behalf of

those small businesses. Small business

concerns often become known to Board

members through outreach and coopera-

tive work with SBA field offices in their

regions. Communication works the other

way, too, as RegFair Board members con-

tinually work to raise awareness among

small businesses in their regions of what

ONO can do to help them.

Board members engaged in many activi-

ties last year designed to spread the word

about ONO and elicit concerns from its

constituents. Much work was also done in

tandem with SBA field offices, including

local District Offices, Small Business De-

velopment Centers, and SCORE, to raise

awareness of ONO’s services among small

business entities. ONO knows that its

outreach efforts will be even more effec-

tive if it continues to engage and support

the SBA field office structure in market-

ing ONO activities. In FY 2004, RegFair

Board members met with SBA District

Directors and invited them and Regional

Administrators to attend and provide

comments at RegFair Hearings. This not

only broadened ONO’s reach and inclu-

siveness but aided efforts to integrate all of

SBA’s work in the field more effectively

32

SBA National Ombudsman2004 Report to Congress

on behalf of small business concerns.

RegFair members also made good use of

material from other SBA program offices

to inform small businesses about other

SBA services. A Model Bill Initiative de-

veloped by the Office of Advocacy—a

State bill that emulates the Federal Regu-

latory Flexibility Act—was promoted by

several Board members in their States to

get the model legislation replicated at the

State level. The value of networking with

the National Federation of Independent

Business, chambers of commerce, and

business leaders at the Federal, State, and

community levels is demonstrated by the

achievements of RegFair Board members.

The great variety of outreach activities ini-

tiated by RegFair Board members in FY

2004 includes the following:

■ Publishing articles in local papers and

media outlets describing ONO,

RegFair Boards, and the comments

process (always including the ONO

website, of course).

■ Meeting with local chambers of com-

merce to discuss ways to inform and

educate chamber membership on how

ONO can assist them.

■ Meeting with county commissioners

and congressional delegations with re-

gard to the RegFair process.

Activity Report: Meeting with Senators in Texas

In Region VI, Joe Shepard, Region VI Chair, held meetings with U.S. Senators John

Cornyn and Kay Bailey Hutchinson, and Texas Senator Troy Fraser, to inform and edu-

cate them about the assistance ONO can provide to Texas small businesses.

■ Initiating one-on-one meetings and

Roundtables with heads of small busi-

nesses and government representatives

to share and discuss issues and con-

cerns.

■ Conducting large mailings to groups

and individuals, expanding outreach

through mailouts to trade associations

with large memberships.

■ Delivering presentations about ONO

and the RegFair process to local gov-

ernmental organizations, citizens’

groups, business advocacy groups, and

SBA District Offices.

■ Securing personal meetings with high-

level elected officials to discuss small

business regulations and legal reform

issues.

RegFair Board members held five meet-

ings in FY 2004, several of which made

use of conference call technology. For

these, the National Ombudsman

chaired calls with either regional

RegFair Board chairs or with members

to learn of small business regulatory en-

forcement concerns and new outreach

methods in the different regions. An in-

person meeting for Board member train-

ing was held in May in advance of the

National RegFair Hearing in Orlando,

Florida.

Activity Report:Reaching Out—Way Out

In FY 2004, Administrator

Barreto and National Ombuds-

man Barrera reached out to

small businesses across the

country through a 50th Anni-

versary “tour,” visiting towns

and cities across the country

to hear what small businesses

were thinking. At a 50th Anni-

versary Luncheon in Albuquer-

que, New Mexico, the 350

people in attendance repre-

sented thousands more from

the U.S. Chamber of Com-

merce, American Indian

Chamber of Commerce,

ACCion, and other groups.

SBA Administrator Barreta,

the keynote speaker, asked

attendees “What do you think

is the most important type of

regulatory issues facing small

businesses today?” According

to an unofficial survey distrib-

uted to them, the predomi-

nant answer was “cost of

regulation.”

33

SBA National Ombudsman2004 Report to Congress

ONO RegFair Hearings:Facilitating theDiscussionAt least one Regulatory Enforcement Fair-

ness Hearing is held in each of the 10

Federal regions each year. Statutorily re-

quired by Congress, RegFair Hearings are

designed to receive and publish, as appro-

priate, public testimony regarding specific

excessive regulatory enforcement actions

by Federal agencies. Less formal Round-

tables, designed to inform trade associa-

tions and chambers of commerce of their

constituents’ rights to file a formal com-

ment about excessive Federal regulatory

enforcement, are—like Hearings—held

on a regional basis.1 What is important is

common to both—providing a forum for

to hear the voice of small business and

fulfilling President Bush’s goal for govern-

ment to be more customer-oriented.

In FY 2004, ONO held 18 Hearings and

Roundtables, exceeding its goal of 15.

The past seven years have witnessed a

trend toward a greater number of Hear-

ings and Roundtables held each year

across the country (see figure 4-1 for the

locations of FY 2004 events). At the FY

2004 events, 86 people presented testi-

mony, representing the interests of thou-

sands of small businesses. The first-ever

national-level RegFair Hearing was held

in Orlando, Florida, on May 21, in con-

junction with the “SBA Expo ’04: Cel-

ebrating National Small Business Week”

conference. Testimony from small busi-

ness owners nationwide was heard, and

members of the 10 RegFair Boards pre-

sented comments regarding compliance

issues from small business owners in their

respective regions.

Reaching Out andFollowing UpIn FY 2004, ONO’s message potentially

reached around 9 million small businesses

through trade associations, chambers of

commerce, newsletters, and media out-

lets.2 In addition to hosting Hearings and

other interactive events, ONO used its in-

formative website and extensive media

outlets to spread the word and to rein-

force its partnerships with Federal agency

decision-makers and with the small busi-

nesses it serves.

ONO promotes its website as the most

efficient means of receiving comments

and the best way to expedite their delivery

to agencies. A tracking system on the

website allows commenters to track their

comments and to receive notice once they

have properly filed and submitted their

information. The website is chock-full of

information needed both by small busi-

nesses and Federal agencies, including

links to agency compliance assistance

activities, information on the Small Busi-

ness Paperwork Reduction Act, and a

wealth of other resources.

2This number was obtained by combiningattendance at Hearings and Roundtables with apercentage of Arbitron rating findings for variousmedia in which ONO had exposure (see appendix).

1Effective in 2005, ONO will refer to bothRegFair Hearings and Roundtables as “Hearings.”

FY 2004 RegionalHearings and Roundtables

� Wilmington, DE, Hearing,

October 28, 2003

� Annapolis, MD, Round-

table, October 30, 2003

� Sacramento, CA, Round-

table, December 4, 2003

� Atlanta, GA, Hearing, De-

cember 9, 2003

� New Orleans, LA, Round-

table, February 12, 2004

� Stamford, CT, Hearing,

March 25, 2004

� St. Louis, MO, Hearing,

April 14, 2004

� Madison, WI, Roundtable,

April 27, 2004

� Yonkers, NY, Roundtable,

April 28, 2004

� Lansing, MI, Roundtable,

April 29, 2004

� Orlando, FL, National Hear-

ing, May 21, 2004

� Rochester, MN, Hearing,

June 10, 2004

� Columbus, OH, Hearing,

June 22, 2004

� Des Moines, IA, Hearing,

June 24, 2004

� Billings, MT, Hearing, July

23, 2004

� Seattle, WA, Hearing, July

27, 2004

� Salem, OR, Roundtable,

July 28, 2004

� Phoenix, AZ, Hearing, Sep-

tember 29, 2004

34

SBA National Ombudsman2004 Report to Congress

ONO also leveraged SBA District Office

operations to conduct a host of outreach

activities, including publishing dozens of

articles in local and specialized media and

trade publications and securing radio and

television interviews to promote ONO

services. In FY 2004, articles about ONO

appeared in dozens of publications, in-

cluding Web and E-Blast communica-

tions. Additionally, more than 20 radio

and TV interviews were conducted with

the National Ombudsman and ONO

staff. Collectively, these radio, newspaper,

Internet, and television communications

and media events had a potential market

of nearly 20 million3 (see table 4-1 for

specific media totals and the appendix for

detail). As awareness and education con-

tinue to grow, so will ONO’s effective-

ness.

Success with TradeAssociations

ONO’s success stories for FY 2004 largely

emanate from its close ties to small busi-

ness trade and professional organizations.

ONO continues to work with national

trade organizations such as the National

Federation of Independent Business and

the National Small Business Association,

to encourage them and their State direc-

tors to get the word out to their member-

ship about ONO and to file comments

on their members’ behalf (see table 4-2).

This has been an effective avenue; in one

case, it resulted in 100 comments filed in

3The total readership/audience numbers shown inthe appendix come from Arbitron, Inc., whichranks radio stations, cable companies, advertisers,etc., by number of listeners—comparable to theNielsen ratings for television.

Madison

St. Louis

New OrleansOrlando

Lansing

Wilmington

Des MoinesStamford

YonkersColumbus

Phoenix

Annapolis

SalemBillings

Seattle

Rochester

Sacramento

Atlanta

Figure 4-1. Hearings and Roundtables Held in FY 2004

“ONO has leveraged good

relationships with trade

associations. They have

been very effective and very

aggressive at outreach,

seeking to have a presence

outside of Washington,

which is important.”

—Giovanni Coratolo,

Director of Small Business

Policy for the U.S. Chamber

of Commerce

35

SBA National Ombudsman2004 Report to Congress

Table 4-1. Potential Audience Numbers Reached through ONO Media Efforts

Radio Newspaper Internet/ONO Event Interviews Articles TV Totals

Wilmington, DE 2,985,820 2,985,820

Annapolis, MD 30,000 30,000

Sacramento, CA 307,238 307,238

Atlanta, GA – – – –

New Orleans, LA 1,667,660 127,900 1,795,560

St. Louis, MO 980,410 56,244 1,036,654

Stamford, CT 85,000 85,000

Madison, WI 767,170 505,775 1,272,945

Yonkers, NY 94,683 94,683

Lansing, MI 248,250 80,000 328,250

Orlando, FL 20,542 20,542

Rochester, MN 139,060 139,060

Columbus, OH 69,130 69,130

Des Moines, IA 400,830 72,988 473,818

Billings, MT 260,640 260,640

Seattle, WA 4,977,300 22,000 4,000,000 8,999,300

Salem, OR 1,061,080 115,570 1,176,650

Phoenix, AZ 708,946 708,946

TOTALS 14,445,979 1,031,019 4,307,238 19,784,236

reaction to a single regulatory agency,

spearheaded by the initiative of one Board

member (see sidebar).

Trade association representation at Hear-

ings and Roundtables is an effective way

to reach many more small businesses.

ONO will continue to use trades as an ef-

ficient means of optimizing its outreach

to small businesses.

ONO Outreach to Agencies

ONO continued to elicit ideas from Fed-

eral agencies to improve the SBREFA

comment process and to increase its effi-

ciency and outreach. ONO met its FY

2004 goal of holding two interagency

meetings to both obtain agency feedback

and inform agency representatives who

are the small business contacts within

their organizations about changes and ex-

pectations. The meetings were held in

November 2003 and March 2004, both

with substantial attendance. At the No-

vember meeting, more than 60 Federal

agency representatives attended—approxi-

mately one-third more than last year—re-

flecting a trend toward greater Federal

agency participation in ONO’s mission.

National Ombudsman Barrera spoke of

the importance of RegFair Hearings and

agency attendance and of the need for all

agencies to get on board with having writ-

ten non-retaliation policies. The Director

of OMB’s Office of Information and

Regulatory Affairs spoke at the March

meeting, which SBA Administrator

Barreto also attended. Topics included es-

tablishing a regulatory enforcement

baseline, assessing agency progress on

Activity Report:Leveraging Associations

Beginning in February 2004,

ONO began receiving com-

ments as the result of the

Food and Drug

Administration’s issuance of a

ruling prohibiting the com-

pounding of drugs for use in

animals without giving af-

fected independent pharma-

cies a chance to comment.

ONO received 19 comments

from small pharmacies. In

June, the International Acad-

emy of Compounding Phar-

macists met in Washington,

D.C., and invited National Om-

budsman Barrera and the Re-

gion I Chair to address their

convention. As a result of the

conference and the lobbying

efforts of the RegFair Board

Region I Chair, who is also a

leader with the Academy,

ONO received an additional 81

comments on the issue.

Happy ending: On November

10, 2004, FDA advised that it

would review the rules, which

have since been revised to re-

flect the interests of small

pharmacies.

36

SBA National Ombudsman2004 Report to Congress

Table 4-2. Small Business Associations Reached in FY 2004

Event/ Organizations MembershipLocation Attending Represented

Wilmington, DE National Federation of Independent Business 964(Hearing) PA-DE Cleaners Association

Annapolis, MD Maryland Chamber of Commerce 900(Roundtable) Governor’s Office of Business Advocacy and

Small Business Assistance

Sacramento, CA Sacramento Black Chamber of Commerce 3,000(Roundtable) Sacramento Metropolitan Chamber of

CommerceSacramento Hispanic Chamber of Commerce

Atlanta, GA The Carpet & Rug Institute 265(Hearing) Hispanic Construction Chamber of Commerce

Maddox Industries

New Orleans, LA Jefferson Chamber of Commerce 5,300(Roundtable) National Federation of Independent Business

Hispanic Chamber of Commerce

Stamford, CT CT Small Business Development Center 149,133(Hearing) SACIA - The Business Council of Fairfield Co.

Small Business Development Ctr–StamfordMayor’s Office of Economic Development

St. Louis, MO Home Builders Association of Greater 1,150(Hearing) St. Louis

Madison, WI University of Wisconsin-Extension 77,900(Roundtable) Wisconsin Small Business Development Ctrs

City of Madison and Dane CountyWisconsin Technical CollegesWisconsin Technology CouncilWisconsin Supplier Development CouncilWisconsin Workforce Development CouncilWisconsin Biotechnology & Medical Device

AssociatesWisconsin SCORE ChaptersIMPACT 7, Inc.Wisconsin Business Development Finance

Corporation

Yonkers, NY Westchester Hispanic Chamber of 20,000(Roundtable) Commerce

Hunts Point Economic DevelopmentOrganization

The Westchester Small Business DevelopmentCenter

The Yonkers Economic DevelopmentCorporation

The Bronx Women Business CenterAfrican American Chamber of Commerce

of WestchesterThe National Minority Business CouncilEmpire State Development CorporationYonkers Hispanic Chamber of CommerceMexican Chamber of Commerce

written non-retaliation policies, achieving

SBPRA burden reduction, and complet-

ing compliance assistance reports. A focus

session was also held to obtain agency

feedback.

ONO continued its excellent relationship

with the Office of Advocacy in FY 2004.

Both Offices see the beneficial results for

small businesses accruing from the

Memorandum of Understanding signed

by National Ombudsman Barrera and

Chief Counsel Sullivan in FY 2002. The

memorandum describes a sharing proto-

col to ensure that small business com-

plaints, comments, and concerns are

handled by the appropriate office. A po-

tential for overlap stems from the Offices’

common goal of fostering a more small

business friendly regulatory environ-

ment.4 Both Offices have helped clarify

their roles to small businesses through in-

formation distributed by ONO at

RegFair Hearings. This reciprocal arrange-

ment ensures that no matter how a com-

ment or concern comes in or to whom, it

is directed to the correct office for resolu-

tion.

Agency Outreach to SmallBusinesses

Federal regulatory enforcement agencies

continue to expand their efforts to con-

4The Office of Advocacy has authority to reviewagency policies with regard to how well they takesmall entities into consideration as part of rule-making procedures. ONO has the authority to in-tervene on behalf of small businesses subjected tounfair enforcement actions by Federal regulatoryagencies and to rate agencies on how well they re-spond to small business concerns.

37

SBA National Ombudsman2004 Report to Congress

Table 4-2. Small Business Associations Reached in FY 2004 (continued)

Event Organizations MembershipLocation Attending Represented

Lansing, MI Michigan Restaurant Association 62,331(Roundtable) SBTDC - Michigan

Michigan Association of House BuildersDetroit Regional Chamber of CommerceMichigan Business Professional AssociationMichigan Economic Development CorporationSmall Business Association of MichiganMichigan Soft Drink Association

Rochester, MN Small Business Development Center 50(Hearing) Metropolitan Economic Development

Association (MEDA)/ProcurementTechnical Assistance Center (PTAC)

Columbus, OH Main Street Business Association 1,830(Hearing) Cincinnati Women’s Business Chamber

Columbus Urban League, Inc.

Des Moines, IA Iowa Small Business Development Centers 19,000(Hearing) State of Iowa Citizens’ Aide/Ombudsman

Business and Industry Group (North Iowa)

Billings, MT Montana Chamber of Commerce 131,897(Hearing) Billings Area Chamber of Commerce

Big Sky Economic Development AuthorityMontana Business IncubatorSmall Business Development Ctr –Billings

Seattle, WA Gladys Gillis 64,777(Hearing) American Civil Liberties Union of Washington

Independent Business AssociationWashington State Society of Enrolled AgentsSCORE Chapter #55Seattle Chinese/Chinatown ChamberWashington State China Chamber of

CommerceWashington Agricultural Legal Foundation

Salem, OR Idaho Anti-Wolf Coalition, Inc. 7,218(Roundtable) Oregon Certified Minority, Women and

Emerging Small BusinessOregon Restaurant AssociationPortland Business AllianceSCORE Chapter #460Oregon Independent Auto Dealers

AssociationAssociated Builders and Contractors, Inc.Northwest Auto Trade Association

Phoenix, AZ National Federation of Independent Business 43,866(Hearing) Arizona Small Business Development Center

Arizona Small Business AssociationGreater Phoenix Black Chamber of CommerceArizona Hispanic Chamber of CommerceSCORENational Assoc. of Women Business Owners

Total Small Businesses Reached 589,581

nect with small businesses and apprise

them of rules, regulations, and helpful re-

sources. Many agencies have increased

outreach to small business entities

through their websites. More agencies

have identified “point people” responsible

for interacting with the National

Ombudsman’s Office. Only a few years

ago, that was more the exception than the

rule, and the turnaround is evidence of

progress. A growing number of agencies

have staff dedicated to shepherding com-

ments received from ONO through their

own systems for prompt, effective re-

sponse.

Several agencies reported increased out-

reach efforts in FY 2004.

■ The EEOC St. Louis District Office

formed a partnership with the Joplin,

Missouri, Chamber of Commerce and

the Small Business Development Cen-

ter at Missouri Southern State Univer-

sity. The main focus of the initiative is

to provide free training courses for lo-

cal small business owners and entrepre-

neurs. Participants attending the ses-

sion expressed their appreciation that a

government agency would “spend the

time and money” to assist the small

business owner in more remote areas.

■ An online “rate the product” survey on

IRS’s small business website

(www.irs.gov/smallbiz) has proven to

be an invaluable resource for informa-

tion and feedback on how its small

business customers rate the variety of

educational products it produces, in-

cluding the website. As of September

38

SBA National Ombudsman2004 Report to Congress

2004, more than 2,736 responses were

logged, providing information that has

assisted key IRS decision-makers in re-

vising and improving products, help-

ing the agency tailor them to focus on

the needs of the small business and the

self-employed community.

■ The National Credit Union Adminis-

tration recently reorganized its Office

of Credit Union Development at

NCUA headquarters and renamed it

the Office of Small Credit Union Ini-

tiatives, offering local and regional

workshops for small credit unions. As

part of outreach efforts to improve

compliance, examiners make interim

supervisory contacts with credit unions

to discuss problems or concerns about

regulatory compliance and other issues.

Reaching Out to theUnderserved

Because of their unique communications

needs, emerging small business communi-

ties may be among the first to experience

Federal regulatory enforcement challenges

and the last to learn of the resources avail-

able to them. ONO is responding to this

challenge by holding meetings with these

small business owners to hear their con-

cerns.

In FY 2004, ONO held 14 Targeted En-

trepreneur Area Market Meetings across

the Nation, exceeding its goal of 12, as

part of efforts to target leadership from

diverse small business groups. Held in

most cities where RegFair Hearings are

scheduled, TEAM Meetings are designed

to bring more emerging businesses into

the comment process, giving them better

access to regulatory compliance assistance.

ONO seeks to inform women, Asian

Americans, African Americans, Hispanic

Americans, Native Americans, veterans,

and other traditionally underserved mar-

kets of the full array of services, programs,

and assistance available through ONO

and SBA. At a TEAM Meeting in New

Orleans, Louisiana, last year, a group of

sugar cane farmers was in attendance,

along with representatives of the Hispanic

Chamber of Commerce, two African

American Chambers, a local National As-

sociation of Women Business Owners

chapter, and a veterans’ group.

The TEAM format is flexible and infor-

mal, lending itself to open discussion with

all small business owners and representa-

tives and with local SBA staff, banking

representatives, and others. TEAM Meet-

ings were held in the following cities in

FY 2004:

■ Atlanta, Georgia, December 9, 2003

■ New Orleans, Louisiana, February 12,

2004

■ Stamford, Connecticut, March 25,

2004

■ St. Louis, Missouri, April 14, 2004

■ Madison, Wisconsin, April 27, 2004

■ Yonkers, New York, April 28, 2004

■ Lansing, Michigan, April 30, 2004

■ Rochester, Minnesota, June 10, 2004

■ Columbus, Ohio, June 22, 2004

■ Billings, Montana, July 23, 2004

Activity Report: Outreachto the Trades

The 75 attendees of a

Northside Canal company an-

nual stockholders’ meeting in

Region X represented approxi-

mately 8,500 people, through

memberships in trade asso-

ciations and other groups.

These included the American

Falls Irrigation District, Burley

Canal Company, and water us-

ers from Idaho, Oregon, Wyo-

ming, and Utah. Also, two

Federal Government agen-

cies—the Department of the

Interior and Bureau of Recla-

mation—presented informa-

tion on the regional drought.

A RegFair presentation was

given and contact information

shared with directors of the

groups represented.

39

SBA National Ombudsman2004 Report to Congress

■ Seattle, Washington, July 26, 2004

■ Salem, Oregon, July 28, 2004

■ Phoenix, Arizona, September 29, 2004

■ Albuquerque, New Mexico, September

30, 2004

ONO also held two bilingual Hearings in

FY 2004. One of these was in Mandarin

Chinese and was held in Seattle; the other

was held in Spanish in Phoenix.

Bilingual AssistanceIncreases Outreach to

Small BusinessCommunity

DOT’s Federal Motor Carrier

Safety Administration has in-

creased its outreach to small

business entities by providing

assistance on its website in

both English and Spanish. The

agency also conducted out-

reach sessions within its divi-

sions to provide educational

and technical assistance to

motor carriers who are subject

to the New Entrant Safety As-

surance Process and to the

rules for Mexico-domiciled

motor carriers.

ONO now also has a Spanish-language

Web page, established in 2002. The

website helps ONO reach an even wider

community and is part of SBA’s larger

outreach program to the Hispanic com-

munity—the fastest growing ethnic group

in the United States. This ONO website

aligns with the format of SBA’s Spanish-

language website, www.negocios.gov/,

and can be accessed at www.sba.gov/

espanol/Ombudsman_Nacional/.

41

SBA National Ombudsman2004 Report to Congress

5Looking Ahead…Plans for the Future

ONO will continue engaging in outreach

efforts through Hearings, media outlets,

RegFair members, SBA partners, trade as-

sociations, and chambers of commerce.

ONO will also leverage resources by opti-

mizing technology, and will continue ef-

forts not only to increase awareness of its

program, but also to ensure its accessibility.

Continuing toReach OutONO will continue to reach out to trades

both nationally and locally through meet-

ings, speeches, presentations, media,

website updates, and regular communica-

tions. A renewed initiative to get the mes-

sage out will focus on a monthly ONO

newsletter disseminated to association

leaders who represent small businesses in

Washington and in the States. National

Ombudsman Barrera is committed to

communicating the good news from

agencies about their efforts for small busi-

ness and the many best practices in place.

At the same time, RegFair Board mem-

bers will be challenged to continue their

work with community and small business

organizations, relying on local SBA offices

and local trade organizations for contact

information and opportunities. To meet

their agreed-upon goals, Board members

will distribute materials, generate website

awareness, and work with local media

outlets to deliver the ONO message.

Making More CreativeUse of TechnologySeveral technology efforts under way at

ONO will continue to evolve as new ini-

tiatives are implemented. The ONO

website will become more interactive and

user friendly, consistent with the overall

implementation of SBA redesign efforts

agency-wide. Greater use of the Internet is

improving the comment process, as the

ease of electronic submission not only

shortens the filing time but also expedites

the Federal agency response process. And

Board members can now access comment

status according to their geographic areas

via a dedicated section of the ONO

website.

ONO also intends to enhance and/or

implement tools that provide compliance

assistance to the small business commu-

nity. Planned Business Gateway Initia-

tives, including www.business.gov—an

e-Government component of the

President’s Management Agenda—offer

integrated solutions to simplify businesses’

access to assistance and online transac-

tions. A strategy to provide compliance

“We are finishing up the

most successful year in

SBA history… While we

have a ways to go, we

appreciate the progress

that’s been made.”

—SBA Administrator Hector

Barreto, ONO Interagency

Meeting, December 2004

42

SBA National Ombudsman2004 Report to Congress

assistance via website links is part of this

planning.

Finally, more consistent and creative use

of email gives ONO the opportunity for

timely communication with Board mem-

bers, Board alumni, Federal agencies,

trade associations, and the public at large.

The ONO E-Blast system is currently

sent to 3,000 subscribers—with more

subscribers added every day—who learn

of ONO events and activities across the

country in which they can participate.

Weekly reports summarizing comments

received are sent to Board members so

they can see what is happening in other

regions nationwide. Additionally, a

unique communiqué known as the

“O Zone” Report, begun by the National

Ombudsman in January 2004, provides

regular updates to RegFair Board mem-

bers, including news within ONO and

SBA, upcoming events, and highlights

that showcase best practice strategies and

ONO successes.

Increasing ONOVisibilityONO will continue its active SBA Dis-

trict Office education program, dedicat-

ing a portion of each local visit to meeting

with District Office personnel to describe

and explain ONO programs and services.

Distribution of this report to all District

Directors and offices has had a positive ef-

fect nationwide by enhancing awareness

and furthering the visibility of ONO. Ad-

ditional marketing materials, consistent

with the SBA marketing program, are in

development for distribution to Board

members in support of their important

work. At all levels, working with media

representatives continues to be empha-

sized.

Finally…The entrepreneurial spirit is alive and well

in America, and small business is the driv-

ing force of the U.S. economy. SBA and

ONO’s job is to help the small business

men and women of America obtain the

assistance, the advice, and the resources

they need to be successful. Fairness and

encouragement for entrepreneurs should

always be at the forefront of efforts to

promote change within Federal agencies

and remove excessive and unfair regula-

tory burden from the backs of small busi-

nesses. The time and money small busi-

nesses spend on excessive enforcement

and unfair actions by Federal representa-

tives could be better used to train employ-

ees, market products, service customers,

and upgrade facilities.

President Bush has called on all Federal

agencies to reduce and remove unneces-

sary and outdated regulations that affect

small business. ONO will continue to

carry out the President’s mandate across

the country, working with resource part-

ners and small businesses directly affected

by Federal actions. An unfettered

economy is a strong economy, for which

ONO will continue to do its part by chal-

lenging unfair Federal enforcement ac-

tions that impede small business forma-

tion and growth.

Building Partnerships

ONO’s work will be expedited

and enhanced as it pursues a

number of partnership initia-

tives:

� ONO has solidified its rela-

tionship with OMB’s Office

of Information and Regula-

tory Affairs; this partner-

ship is critical to Small

Business Paperwork Relief

Act requirements for data

collection and publication

of Federal agency informa-

tion intensify.

� ONO and RegFair Board

members will continue to

work with the SBA Office

of Advocacy and collective

resource partners to sup-

port the model RegFlex

State legislation.

� ONO will add to its growing

list of Internet linkages

with small business organi-

zations, including trade as-

sociations, chambers of

commerce, the National

Association of Women

Business Owners, the Na-

tional Federation of Inde-

pendent Business, and

other organizations as they

are identified.

43

SBA National Ombudsman2004 Report to Congress

Appendix: Media Outreach

Market Size/Event/Date Radio/TV Interviews Newspaper Articles Internet / Visits Arbitron Rating

Wilmington, DE Two radio stations (WDEL- WDEL: 2,830,470Hearing (1150 AM and WILM- WILM: 155,350October 28, 2003 1450 AM) ran ads about

the RegFair Hearing inWilmington

Annapolis, MD MD Daily Record: Andrea Circulation: 30,000+Roundtable Cecil, business writer,October 30, 2003 attended event and

wrote an article

Sacramento, CA The Sacramento Bee Circulation: 307,238Roundtable ran 4-line ad about theDecember 4, 2003 Roundtable 12/01/03

New Orleans, LA “La Fabulosa” WFNO-830 VoceroNews.com, bilingual WFNO: 658,830TEAM Meeting AM: live phone interview newspaper, interviewed WYLD: 350,000February 12, 2004 in Spanish w/ José Méndez Peter Sorum 2/10/04 VoceroNews: 90,000

2/6/04 City Bus. circ: 37,900

Harold Clarke, Sunday Rich Webster, New Orleans Biz Radio: 658,830

Journal, WYLD-FM 98.5 City Business newspaperinterviewed Peter Sorum interviewed Peter Sorum

2/12/04

Bob Christopher, Biz The Advocate published adRadio 990 (WGSO) inter- about event in Businessviewed Peter Sorum section 2/10/042/11/04

Stamford, CT Brad Davis, WDRC – Fairfield Citizen News ran Event information WDRC: 980,410TEAM Meeting Hartford: phone inter- article promoting event placed on website Fairfield circ: 15,000March 25, 2004 view w/ Michael Barrera 3/12/04 CTCalendar.com Advocate circ: 28,357

3/24/04 starting 3/1/04 Greenwich circ: 12,887

RegFair Board memberJames Knott Sr. wrotearticle about event forBusiness section ofTelegram & Gazette3/16/04

Stamford Advocatereporter Richard Leecovered event andinterviewed PeterSorum after Hearing

Greenwich Time ranarticle about RegFair3/26/04

44

SBA National Ombudsman2004 Report to Congress

Market Size/Event/Date Radio/TV Interviews Newspaper Articles Internet / Visits Arbitron Rating

St. Louis, MO St. Louis Small Business Circulation: 85,000TEAM Meeting Monthly had article aboutApril 14, 2004 RegFair Hearing

Madison, WI “La Voz Hispana” KFIZ- Sun Prairie (The Star) KFIZ: 418,580TEAM Meeting 1450 AM conducted a conducted phone inter- WLMV: 348,590April 27, 2004 prerecorded interview in view w/ Michael Barrera Sun circ: 11,500

Spanish w/ José Méndez 4/22/04 Sentinel circ: 430,7554/19/04 Comm. circ: 75,000

“La Movida” WLMV-1480 Milwaukee Journal SentinelAM: live phone interview ran article promotingin Spanish w/ José Méndez event 4/27/044/21/04

Milwaukee CommunityJournal ran article pro-moting event 4/27/04

Yonkers, NY City of Yonkers Cable TV Journal News of West- Yonkers Business Journal circ: 94,683TEAM Meeting taped entire program chester covered session Week.com pro-April 28, 2004 4/28/04 4/28/04 moted event on

site starting 4/6/04

Journal News.comran article 4/29/04about local businessowner in relation toevent

Lansing, MI Chris Holman Show, Lansing State Journal. WJIM: 248,250TEAM Meeting News/Talk WJIM-1240 com ran article Journal circ: 80,000April 29, 2004 AM interviewed Richard 4/26/04 promoting

Temkin, MI District eventDirector 4/23/04

Orlando, FL Jacksonville Business Jacksonville: 10,000Nat’l RegFair Hearing Journal ran article Orlando circ: 10,542Mary 19–21, 2004 5/11/04 promoting event

Orlando Business Journalran article 5/13/04promoting event

Rochester, MN Rick Peterson, “Good Bizpathways.org ran KROC: 139,060Team Meeting Morning Show” KROC- ad about RegFairJune 10, 2004 1340 AM interviewed Hearing 6/8/04

Peter Sorum 6/11/04

Peter Sorum met w/Congressman GilGutknecht’s staff;former Mayor ChuckCanfield; other localleaders 6/9/04

Peter Sorum met w/Mayor Ardell Brede 6/10/04

Columbus, OH WVKO-1580 AM: live Cincinnati Business News release about WVKO: 69,130TEAM Meeting phone interview w/ Incubator, Inc., ran event posted onJune 22, 2004 Peter Sorum 6/22/04 article about Hearing Columbus & Cincinnati

6/10/04 web page

Business First Columbus. News release for eventbizjournals.com ran ran on prweb.comarticles after event 7/2/04

45

SBA National Ombudsman2004 Report to Congress

Market Size/Event/Date Radio/TV Interviews Newspaper Articles Internet / Visits Arbitron Rating

Des Moines, IA Matt Kelly, Radio Iowa, Jennifer DeWitt, 60 stations: 400,830TEAM Meeting conducted prerecorded QCTimes.com, ran QCTimes: 54,000June 24, 2004 phone interview w/ article about ONO Hawk Eye: 18,988

Michael Barrera about and promotingRegFair Hearing 6/22/04 Hearing 6/12/04for airing over 60 radiostations in IA Hawk Eye ran ad

about RegFair Hearing6/20/04

Billings, MT “Dave Berg in the Morning” Peter Sorum attended Northern Sys: 98,150TEAM Meeting (Northern Broadcast meetings w/ Sen. KXLO: 64,100July 23, 2004 System) interview w/ Peter Conrad Burns, Rep. KOFI: 98,380

Sorum 7/31/04 Denny Rehlberg, Sen.Max Baucus 7/17/04

“KXLO Live with Ken” Peter Sorum attendedinterview w/ Peter Sorum meetings w/ MT Chamber7/15/04 of Commerce and Small

Business Dev. Ctr staff

Wendy Austrim Price of“KOFI Coffee Talk” inter-view w/ Peter Sorum7/15/04

Seattle, WA “Carl Jeffers Show” Seattle Times ran ad for Seattle Federal Execu- KIRO: 1,659,100TEAM Meeting (KIRO-710 AM) Hearing in Business tive ran ad about Hearing KOMO: 1,659,100July 27, 2004 live phone interview w/ Events Calendar 7/21/04 in July “Tip Sheet” issue KNWX: 1,659,000

Michael Barrera 7/18/04 Cable: 2 mil.

Brian Gregory, Business Washington Policy Times: 220,00Editor, KOMO Radio, Center-Current News 4 News: 2 mil.interviewed Michael ran ad on website pro-Barrera 7/26/04 moting Hearing 7/13/04

Harmon Shay, BusinessReporter, KNWX-1210, Michael Barrera touredinterviewed Michael Barrera Chinatown/International7/26/04 District; met w/ Chinese,

KOMO 4 News TV inter- Somalian business

viewed Michael Barrera owners 7/26/04

at Somali Market inSeattle 7/26/04 Michael Barrera met w/

Terry Minton, North- group of Hispanic business

western Afternoon and community leaders

Cable News interviewed 7/27/04

Michael Barrera atSomali Market 7/26/04

Salem, OR Chad Burton, KBNP-1410 Albany Democrat Herald KBNP: 1,061,080TEAM Meeting AM, interview w/ Michael ran ad about Roundtable Statesman J: 56,570July 28, 2004 Barrera 8/3/04 7/27/04 Statesman.com: 59,000

Statesman Journal ranad in Business sectionabout Roundtable 7/27/04

Matt Monaghan, StatesmanJournal.com, wrote articleabout local business ownersand promoting event 7/28/04

46

SBA National Ombudsman2004 Report to Congress

Sample News Coverage

Milwaukee Journal Sentinel Oct. 21, 2004: SBA Administrator Hector V. Barreto announced the event during a visitMilwaukee, WI to Sonag Co. Inc., a Milwaukee construction firm that has secured government work.

The Sacramento Bee Thursday, December 4, 2004: 1-3 p.m. – The U.S. Small Business AdministrationSacramento, CA presents a forum called “National Small Business Ombudsman Reviews Excessive

Federal Regulatory Enforcement” at Plaza Del Paso…

Jacksonville Business Journal May 11, 2004: The U.S. Small Business Administration is offering small businessJacksonville, FL owners a chance to weigh in on excessive enforcement of federal rules, but they’ll have

to travel to Orlando to do so. That’s the rule.

Bizpathways Bizpathways EventRochester, MN Title: Small Business Regulatory Fairness Board Hearing

Date: 6/10/2004Location: Rochester Community and Technical College Heintz Center, Rochester,Minnesota

The Journal News.com April 29, 2004: …Yesterday, Pat Cory took his complaint to bureaucrats who assembledYonkers, NY for a meeting of the U.S. Small Business Administration’s Regulatory Fairness Hearing

Board in Yonkers.

Lansing State Journal April 26, 2004: Small-business owners who want to gripe about federal regulations willLansing, MI be heard this week, when an official will be in town from

Washington, D.C., to lend an ear.

Milwaukee Community News April 24, 2004: National Small Business Ombudsman Review Excessive FederalMilwaukee, WI Regulatory Enforcement: MADISON-Community and business leaders will discuss their

concerns with Peter Sorum, senior advisor to the U.S. SBA’s National Ombudsman.

Jacksonville Business News As part of SBA Expo ’04, the agency’s three-day national conference in Orlando thisJacksonville, FL week, small business owners can attend the Regulatory Fairness Board hearing May 21.

“We work with agencies back in Washington, D.C. to encourage a less punitive and moresmall-business friendly regulatory environment,” said SBA National Ombudsman MichaelBarrera.

Milwaukee Journal Sentinel June 19, 2002: A Hearing of the SBA Regulatory Fairness Board is set for 9 a.m. toMilwaukee, WI noon July 8 at the Italian Community Center, 631 E. Chicago St.On hand will be Michael

Barrera, the SBA national ombudsman, who works with federal agencies to encourage aregulatory environment friendly to small business.

Cincinnati Business Incubator, Inc. …information gathered from the hearing will be shared with government officials in theCincinnati, OH ombudsman’s annual report to Congress and with directors and managers of federal

regulatory agencies to help them with their enforcement actions.

Quad-City Times Online Michael Barrera, the national ombudsman for the U.S. Small Business Administration, orDavenport, IA SBA, will host a regulatory enforcement fairness hearing June 24, via the Iowa

Communications Network.

Market Size/Event/Date Radio/TV Interviews Newspaper Articles Internet / Visits Arbitron Rating

Phoenix, AZ Arizona Republic ran Republic: 486,131TEAM Meeting article about Hearing Star: 107,815September 29, 2004 9/30/04 Prensa: 65,000

Arizona Daily Star ran La Voz: 50,000

article about Hearing9/30/04

Michael Barrera wasinterviewed by twoHispanic newspapers,Prensa Hispana and La Voz

Totals (Potential) Radio Listeners: News Readers: Web/TV Viewers: All Media:

14,445,979 1,031,019 4,307,238 19,784,236